US Jobs Report: Payrolls Rise Just 29,000 as Unemployment Rate Hits 4.2%

The US jobs report for September revealed a surprise downturn in employment growth, as payrolls increased by just 29,000. This figure falls short of the expected 84,000 gain predicted by economists.

The unemployment rate rose to 4.2% from 4.1%, while the labor force participation rate edged up to 61.8%. The September employment gain was accompanied by significant downward revisions to the previous two months: July's payroll growth was revised down by 31,000 and August's employment growth was revised down by 29,000.

The combined effect of these revisions means that employment gains in July and August were 60,000 lower than previously reported. Mohamed A El Erian, economist and chief economic advisor at Allianz, noted the impact on the Federal Reserve's next policy decision, saying 'This will reinforce the impact of recent Fedspeak in calming expectations about an October rate hike.'

The weak jobs report immediately boosted financial markets as traders assessed what the figures could mean for the Fed's next policy decision. The S&P 500 futures rose 0.8%, while Dow Jones Industrial Average futures gained 458 points, or 0.9%. Nasdaq-100 futures climbed 1.2%.