Nonfarm payrolls added 119,000 jobs in September but employment “has shown little change since April,” the U.S. Bureau of Labor Statistics (BLS) said in its delayed release of the Employment Situation jobs report for September, which had been paused due to the government shutdown.

The national unemployment rate ticked upward in September to 4.4%, its highest level since October 2021, with job losses concentrated in transportation, warehousing and federal government employment.

Health care, food services and drinking places, and social assistance sectors saw job gains in September, adding 43,000, 37,000, and 14,000 roles, respectively.

The BLS announced it will not publish Employment Situation data for October, making the September jobs report the last government employment report for the Federal Reserve to digest before its next policy meeting on Dec. 9 and 10.

The delayed September jobs report included BLS revisions to its monthly estimates for July and August, lowering the two months’ combined total by 33,000.

July’s nonfarm payroll totals were revised lower by 7,000 jobs to 72,000, while estimates of 22,000 jobs added in August reversed by 26,000, to a net loss of 4,000 jobs that month.

The most recent Job Openings and Labor Turnover Survey (JOLTS), published by the U.S. Census Bureau one day before the government shutdown, showed hirings and firings remained essentially flat in August as job gains stagnated, though the revision to net job losses in August would likely shift the hirings and firings ratio.

Like many federal offices, the BLS was temporarily shuttered due to the government shutdown, which lasted 43 days from Oct. 1 to Nov. 12, when seven Democratic senators and an independent from Maine joined Republicans in ending the impasse.

With government data reporting paused, private companies offered a degree of visibility into September labor trends ahead of the Federal Reserve’s late October policy meeting, at which policymakers lowered the fed funds rate by 0.25% for the second straight month.

The payroll processing firm ADP, for example, reported 32,000 job losses in September, a reversal from the modest addition of 54,000 jobs recorded in August. ADP reported 42,000 private payroll job gains in October.

Economists’ takes

“Despite the larger-than-expected increase in payroll employment in September, on net, this report aligns with other data showing a somewhat softer labor market, but not one that is rapidly declining in strength,” commented Mike Fratantoni, chief economist at the Mortgage Bankers Association (MBA), regarding Thursday’s BLS release.

The MBA expects the Federal Reserve to reduce its benchmark borrowing rate by an additional 0.25% in December.

Underscored in minutes released Wednesday from their October meeting, Fed policymakers have expressed “strongly differing views” that complicate the consensus-driven process by which they set monetary policy.

Sam Williamson, senior economist at data analytics and title insurance provider First American Financial Corp., described the September jobs report as “mixed,” leaving the path to additional easing uncertain as employers “ended the summer on a positive note.”

“Hawks will argue inflation remains too high for more cuts, while doves see rising unemployment as justification for additional support,” said Williamson.

Cleveland Fed President Beth Hammack is one of those hawks. Hosting the central bank’s 2025 Financial Stability Conference at her bank’s headquarters on Thursday, she ranked inflation as one of her top three economic concerns alongside private credit markets and stablecoins.

“Financial conditions are quite accommodative today,” she said in opening remarks at the conference, citing “easy credit conditions.” She questioned the framing of rate cuts as an “insurance policy” against a more severe jobs downturn when she has observed inflation above the Fed’s stated 2% annualized growth target for more than four years.

Hammack, who is currently an alternate member of the Fed’s rate-setting committee, has been vocal about supporting a pause in rate cuts, joining a growing coalition of other Fed policymakers. Fed Chair Jerome Powell, during his post-meeting press conference last month, observed that employment conditions seem to have stabilized within a sustained gradual cooling trend.

The semiannual Financial Stability Report, the fall edition of which was released Nov. 7 by the Fed’s Committee on Financial Stability, showed policy uncertainty — including risks to Fed independence and geopolitical risks — ranked highest among Fed policymakers’ financial stability concerns.

In remarks at the Brookings Institution ahead of the report’s release, Fed Governor Lisa Cook, who chairs the financial stability committee, affirmed the Fed’s “absolute commitment” to returning inflation to its 2% target, warning she “will be prepared to act forcefully” if she sees “higher levels of inflation are becoming entrenched in expectations.”