September 2025 Jobs Report Reveals Mixed Economic Picture

The US economy added 119,000 jobs in September 2025. This figure surpassed many economists’ forecasts. The data was released after a seven-week government shutdown delay.

The report provides a crucial snapshot for the Federal Reserve. Policymakers will use it to guide their decisions on interest rates. The timing is critical ahead of their December meeting.

Unemployment Rate Climbs to a Four-Year High

Despite the job gains, the unemployment rate rose to 4.4%. This is the highest level since October 2021. The increase signals a cooling labor market.

Revised data for August now shows a loss of 4,000 jobs. This reverses the initial report of a 22,000 gain. The labor market is clearly showing signs of strain.

Layoff announcements surged dramatically. According to Challenger, Gray & Christmas, job cuts jumped 175% year-over-year in October. Major companies like Verizon are implementing significant workforce reductions.

Sector Performance Shows a Divided Economy

Job growth was not evenly distributed. Health care and social assistance led all sectors. They added 57,100 positions in September.

Leisure and hospitality also saw strong gains. Unseasonably warm weather helped add 47,000 jobs. This sector continues its post-pandemic recovery.

Other areas experienced declines. Professional and business services lost jobs. Manufacturing and federal government employment also shrank.

Wage Growth Fails to Outpace Inflation

Average hourly earnings increased by 3.8% over the past year. This sounds positive for workers. However, inflation has eroded these gains.

Real wages, adjusted for inflation, grew by just 0.8%. This continues a pattern of stagnant purchasing power. Household budgets remain under pressure.

The White House highlighted private sector job growth. It noted that gains went to American-born workers. However, economists caution that the data does not support such specific claims.

Federal Reserve Faces a Complex Decision

Financial markets reacted with volatility. Stocks gave up early gains despite strong earnings from companies like Nvidia. Investor caution is clearly growing.

Key fear indicators spiked significantly. The VIX volatility index jumped 13% in one session. CNN’s Fear and Greed Index hit its lowest point since April.

Mortgage rates continued their upward trend. The average 30-year fixed rate reached 6.26%. This marks three consecutive weeks of increases.

The September 2025 jobs report presents a complicated economic narrative. Stronger-than-expected hiring coexists with rising unemployment and persistent inflation. This mixed picture ensures the Federal Reserve will proceed with extreme caution in the coming months.

Info at your fingertips

What was the unemployment rate in September 2025?

The unemployment rate reached 4.4% in September. This is the highest level recorded since October 2021. The increase reflects a cooling labor market.

Which sectors added the most jobs?

Health care and social assistance led job growth. This sector added 57,100 new positions. Leisure and hospitality followed with 47,000 new jobs.

How did wage growth compare to inflation?

Wages grew 3.8% year-over-year in September. However, inflation reduced real wage growth to just 0.8%. This continues to squeeze household budgets.

Why was the jobs report delayed?

The report was delayed for seven weeks. A federal government shutdown caused the postponement. This created a significant data gap for economists.

What does this mean for interest rates?

The mixed data complicates the Federal Reserve’s decision. Markets see a 36% chance of a December rate cut. Most analysts expect rates to hold steady until January.