September Jobs Report Seen Showing Hiring Plateau After August Surge

Key Takeaways

• Friday’s nonfarm payroll report is expected to show hiring moderated in September after a surprisingly strong August.
• Economists say the data will likely show the US labor market remaining stable, despite slower job creation and fears about AI-driven displacement.
• The data will likely bear less on the Fed’s October interest rate decision than upcoming inflation data, analysts say. Still, a soft report could trim expectations for the number and pace of rate increases.

Friday’s September employment report is expected to show the US economy continued to add jobs at a solid pace after surprisingly strong hiring in August. While economists say seasonal adjustments and slow labor supply growth have made employment data volatile, the report is expected to affirm that the “low fire, low hire” labor market remains stable, if sluggish.

Forecasters predict the United States added 95,000 jobs in September, a slowdown from August’s unexpected 162,000, according to FactSet. The unemployment rate is expected to hold steady at 4.1%. Economists at Oxford Economics expect gains to broaden from August, when more than half of growth was concentrated in the leisure and hospitality and government sectors.

Friday’s report is expected to have less of an impact on the Federal Reserve’s interest rate decision next month than inflation data slated for release in mid-October. “The labor side of the Fed’s congressional remit is in good shape,” said Chair Kevin Warsh earlier this month when explaining the central bank’s decision to raise rates for the first time since 2023. Still, economists say the report could affect the market’s confidence around the number and timing of additional hikes this year.

Ultimately, economists expect the data to paint a picture of a sleepy but stable job market. “The labor market is resilient, but I don’t see signs that the market is improving,” says Adam Schickling, senior economist at Vanguard. “At best, it’s plateaued.”

September Jobs Report Forecast Highlights

• Job report release date and time: Friday, Oct. 2, 2026, at 8:30 a.m. EDT
• Nonfarm payrolls are expected to increase by 95,000 in September vs. 162,000 in August, according to FactSet.
• The unemployment rate is forecast to remain unchanged at 4.1%.
• Average workweek is expected to be 34.3 hours vs. 34.4 in August.
• Hourly earnings are forecast to hold steady at a monthly increase of 0.3%.

September Job Growth Seen Moderating from August’s Big Gains

Friday’s labor market update follows surprising job reports for July and August. July’s report showed an unexpected decrease of 23,000 jobs, compared with expectations for an 80,000 increase. That shock primed investors for middling August numbers, but instead the US added 162,000 jobs that month, about 2.5 times economists’ predictions. At the same time, the July figures were revised up to a 21,000-job increase.

Seasonal adjustments made data over the past few months “noisy,” according to Nancy Vanden Houten, lead US economist at Oxford Economics, “but our September forecast implies little change in trend job growth overall.” Barring major revisions to July and August, her firm’s forecast of a 45,000-job increase would lift the three-month moving average to 76,000, easily above their breakeven estimate of about 50,000.

Oxford Economics expects “much weaker” government and leisure and hospitality hiring compared with August, when seasonal adjustments inflated growth, but most other sectors are expected to post stronger growth, “in line with the recent trend of job gains broadening out.”

Bank of America Securities economists agree that “the recent labor-market backdrop points to further broadening in hiring across industries in September.”

The unemployment rate is expected to hold steady at 4.1% in September, but economists say that if it does change, it’s more likely to tick higher than continue descending from 4.4% in February (the last time it rose).

Vanguard’s Schickling expects an unusual drop in unemployment among foreign-born workers, who make up about 19% of the labor force, to have run its course. The foreign-born unemployment rate fell to 3.4% in August from 4.4% the year before; over that same period, the native-born unemployment rate was unchanged at 4.6%. “I don’t think the non-citizen unemployment rate can continue to decrease, so the tailwind that has had for overall unemployment has likely faded,” says Schickling.

Citigroup economists predict that, considering the labor supply’s outsized impact on the unemployment rate, “wage growth will be the ultimate signal for whether the labor market is tightening.” Annual wage growth has steadily moderated over the past two years, and in August, it declined to 3.1%, below the 2019 average. Hourly earnings are expected to increase 0.3% in September, the same monthly pace as August and “consistent with a labor market that is not retightening,” according to Citigroup.

What the September Jobs Report Could Mean for the Fed

Fed officials have emphasized in recent months that they are squarely focused on controlling inflation, which has run above the central bank’s 2% target for more than five years. Economists predict Friday’s jobs report is unlikely to divert that focus before the next rate decision in late October.

Some, however, see a small chance that Friday’s data impacts what investors expect the Fed to do. The market-implied odds of a quarter-point rate hike in October dropped from 71% on Monday to about 34% on Thursday, after dovish comments from New York Fed President John Williams and a cooler-than-expected inflation report. Still, the odds of an October hike are up from 19% a month ago.

“If we were to get a negative number—maybe downward revisions coupled with a higher unemployment rate—I think it’s going to be hard for the market to maintain its level of confidence in an October rate hike,” says Vanguard’s Schickling.