Bad Jobs Report
I talk about the jobs report in this week's podcast. Here is more on that and what you should know.
The short version
- The job market is cold: 29,000 new jobs when 84,000 were expected.
- Hiring has stalled, not collapsed. Fewer people are being let go, and fewer are being hired.
- If you're job hunting, the burden of proof is on you. Start with the people who already know your work.
The jobs report
Employers added 29,000 jobs in September. Economists had expected 84,000. The unemployment rate ticked up to 4.2% from 4.1%.
And last month's 162,000 new jobs? It was a blip. August came in hot because school years started a week or two later this year, and most of the gains were teachers. Once the data caught up, July and August were revised down by 60,000 jobs combined.
But stocks went up?!
Because a weak job market makes the Federal Reserve less likely to raise rates again. After the jobs report, prediction markets cut the odds of a hike at the October 27–28 meeting to 25%, down from 70% before the numbers came out (Reuters).
Let's dig into the data
1.Who is getting the jobs?
Since January 2025, the economy created 930,000 new private jobs. Women got 813,000 of them. That's nearly 9 out of every 10. The largest job gains were in the health and education sectors, which have traditionally employed more women.
2.Your wages aren't keeping up.
If you got a raise this year and somehow feel like you have less money, this chart is why. When prices grow faster than paychecks, your real wage falls, even if the number on your pay stub went up.
3.The racial unemployment gap widened.
The gap between Black and white unemployment widened in September. While one month is not a trend, research has shown for years that Black workers tend to be the last hired and first let go when the labor market weakens (Couch & Fairlie, 2010). In a cooling market, this number is worth watching.
Couch, K. A., & Fairlie, R. W. (2010). Last hired, first fired? Black-white unemployment and the business cycle. Demography, 47(1), 227–247.
4.Long-term unemployment is climbing.
In September, 27.1% of unemployed people had been looking for 27 weeks or more. That's more than 1 in 4 people searching for six months or longer. This is what a low-hire, low-fire market does. It doesn't push many people out. It just keeps the people already outside waiting longer.
What does a cold market mean to you?
Companies aren't laying people off, but they aren't taking chances on anyone either. Investors are doing the same thing. Grad programs are becoming more selective, mostly due to funding. So whether you're raising money for a startup, graduating in May, or choosing between grad school and a job offer, everyone is asking you the same question: Where's the return? Show me the evidence that you are a safe bet.
If you're a senior with an offer letter, celebrate, then keep going. Offers are getting rescinded at a higher rate, so keep your network warm until your first day (and beyond).
And if you've been searching for six months, you're one of that 27.1%. Stop sending the hundredth application and start with the people who already know your work. It is time to warm up your contact list again.
Watch the breakdown
I walk through the September jobs report and what it means for you.
Watch on YouTube
For the classroom: The jobs report came in far below expectations, and stocks went up. Why would bad news for workers be good news for investors?
Want the conversation behind the numbers? Listen to "Would You Hire You?" with Dr. Jeni Al-Bahrani.