Data released by the U.S. Labor Department on Friday showed the economy added just 29,000 jobs in September, compared with forecasts for about 90,000, while the unemployment rate rose to 4.2% from 4.1% in August.
August data revised lower
September's reading was far below August's pace, which was revised down to 133,000 jobs from an initial estimate of 162,000.
Economists' estimates before the report ranged from 35,000 jobs at the low end to 180,000 at the high end, amid the possibility that seasonal-adjustment fluctuations affected the September reading and the revision to the previous month's data.
Unemployment rises to 4.2%
The unemployment rate rose to 4.2% in September from 4.1% in August, as the available labor force contracts because of retirements and the administration of U.S. President Donald Trump has tightened immigration policies.
Despite the sharp slowdown in hiring, the data showed no signs of a major wave of layoffs. New applications for unemployment benefits remained at their lowest level in 57 years, while domestic demand remained strong and corporate profits grew.
Job gains fall short of labor market needs
Economists estimate that the U.S. economy needs to add between 50,000 and 80,000 jobs a month to keep pace with growth in the working-age population, putting September's gain of 29,000 jobs below that range.
The sharp slowdown is putting the labor market's performance under closer scrutiny as markets assess the trajectory of the U.S. economy and monetary policy in the period ahead, with seasonal factors potentially contributing to recent data volatility.
