So much for a September surge.

August’s unexpected yet strong job growth was not matched in September, according to the latest jobs report from the Bureau of Labor Statistics. Payroll gains were quite meager in September, coming in well below analysts’ expectations, as myriad economic challenges likely had employers pumping the brakes on hiring.

Diving into the data. Employers added just 29,000 jobs in September, around two-thirds of the average monthly gains of 45,000 over the last year. Downward revisions for prior months now estimate that the labor market lost 10,000 jobs in July, and while adding 133,000 in August.

“The labor market is quite a bit softer than what we were expecting to walk into this morning,” Nicole Bachaud, labor economist at ZipRecruiter, told HR Brew.

September’s weak payroll growth likely stems from multiple factors fueling economic anxiety for businesses. The ongoing US-Israeli war with Iran has increased energy and oil costs, which in turn will soon spike the costs of most consumer goods, likely impacting spending and hurting businesses’ bottom lines. In addition, rising inflation and an interest rate hike from the Fed in mid-September (which was anticipated) may have dissuaded companies from growing, in turn preventing them from hiring more staff, experts told us.

“All of that leads to more expensive borrowing costs, and that’s leading to some hesitations from employers,” Bachaud said.

The sectors that did see growth include those with primarily highly-skilled, hands-on roles. Healthcare added 17,000 jobs in September, primarily in ambulatory care and hospitals, though growth was still weaker than the average 33,000 average monthly gains seen over the last year. Construction added 11,000 jobs, above its 12-month average monthly gains of 10,000, and manufacturing added 9,000 jobs, and is up 72,000 from December 2025.

Meanwhile, several traditionally white-collar industries reported payroll declines month over month, including information, financial activities, and professional and business services. Many jobs in these fields are highly exposed to AI and other automation technology, and employers are likely holding back on hiring as they figure out what responsibilities and competencies will be most important as these roles change.

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