September Jobs Report Crushes Hopes for Fed Rate Hike in October

The US labor market showed a significant decline in September, adding only 29,000 new jobs as the unemployment rate edged up to 4.2%. This weak performance makes it less likely for the Federal Reserve to opt for another interest rate hike when the FOMC meets on October 27-28.

The Bureau of Labor Statistics reported that nonfarm payrolls grew by only about a third of economist expectations, with health care adding 17,000 new jobs and construction +11,000. However, financial activities employment continued to lag, shedding 7,000 jobs over the month.

Realtor.com senior economist Jake Krimmel notes that while the September numbers are a 'clear miss,' they mostly extend trends that have defined the market in recent years. He predicts that the low hire, low fire market will likely stay entrenched as we head into 2027.