The U.S. economy added just 29,000 jobs in September, missing the consensus forecast of 90,000 by 61,000 positions. The miss triggered immediate repricing in the bond market, with the 10-year U.S. Treasury yield falling 6 basis points to 5.17 percent.
Unemployment rose to 4.2 percent, while labor force participation ticked up to 61.8 percent from 61.6 percent. Wage growth decelerated sharply: hourly wages gained 0.1 percent for the month and 3 percent year-over-year, down from 3.1 percent in August. Through August, inflation had outpaced wage growth for five consecutive months, eroding real purchasing power.
The hiring weakness signals the Federal Reserve faces diminishing pressure to tighten further. Bond investors immediately repriced rate-hike expectations lower, driving the sharp Treasury rally. The next Consumer Price Index report on Oct. 14 will test whether the labor market slowdown translates into cooling inflation.
Job growth concentrated in healthcare, while white-collar sectors posted losses. Within construction, data center employment proved resilient, adding 11,000 positions in nonresidential specialty trade contracting. Residential construction contractors shed nearly 8,000 jobs, exposing a structural divergence in labor demand between data center infrastructure builds and homebuilding.
Zach Fritz, an economist at Associated Builders and Contractors, said the current construction labor surge is driven heavily by data center expansion, pointing to a durable shift in sectoral composition rather than cyclical strength.
