The U.S. job market showed signs of weakness in September, with hiring slowing sharply and the unemployment rate edging higher, according to a Labor Department report released Friday.
Employers added just 29,000 jobs last month, far fewer than forecasters had expected. Job gains for July and August were also revised downward by a combined 60,000, pushing July's total into negative territory.
The September figures do not indicate widespread layoffs, but financial services and government both shed workers. Most industries continued to add jobs, though at a slow pace. Even healthcare, which has been a consistent source of employment growth, added only 17,000 jobs in September.
Restaurants and bars accounted for 11,000 of the month's new positions, roughly one third of all jobs added.
"The good news is you're not seeing a lot of layoffs," said Sarah House, senior economist at Wells Fargo. "But it's really hard if you are one of those workers who loses your job or you're new to the labor force or you're coming back, there's not a lot of turnover. So it makes it harder to get your foot in the door right now."
Average wages in September rose just 3% compared with a year earlier, a smaller annual increase than the previous month. Analysts say the figure is likely insufficient to keep pace with inflation, as prices have been rising faster than paychecks in recent months, eroding workers' real buying power.
The Federal Reserve raised its benchmark interest rate by a quarter of a percentage point two weeks ago in an effort to curb inflation. The weak jobs report makes it less likely the central bank will raise rates again when policymakers meet later this month, a prospect that triggered a modest rally in stock and bond markets. Investors still expect at least one additional rate increase before the end of the year.
The unemployment rate rose to 4.2% in September, up from 4.1% the previous month. The increase was largely attributed to an influx of 485,000 additional workers entering the labor force. The share of adults either working or actively seeking work edged up by two-tenths of a percentage point.
