U.S. employers added just 29,000 jobs in September, unemployment rose to 4.2%, and consumer confidence fell to its lowest level since April 2014. Economists had expected about 90,000 new jobs. That gap confronts workers with elevated prices, sluggish wage growth and rising mortgage costs, while investors watched stocks recover toward record levels.
Labor Department revisions cut July and August payrolls by a combined 60,000 jobs. Average hourly wages rose 3% from a year earlier, the smallest annual increase since May 2021. For people relying on wages, the employment figures offer little sign of broad relief as prices continue to press on household budgets.
Who Pays for the Slowdown
The Conference Board’s consumer confidence index fell 6.7 points to 81.9 in September, from 88.6 in August. That reading marked its lowest level since April 2014 and came in below the index’s pandemic low. Survey responses gathered from Sept. 1-23 were mostly pessimistic; respondents often pointed to the cost of gasoline, goods and services.
Respondents’ assessment of their present situation dropped 7.9 points to 109.3, while their short-term outlook slipped 5.9 points to 63.6. The Associated Press reported that prices stayed elevated and wages stagnated amid the Iran war as Americans’ confidence in the economy hit its lowest level in more than a decade.
Consumer prices rose 3.4% in August from a year earlier, below economists’ expected 3.7%. Monthly prices climbed 0.3%, compared with 0.1% in July. Excluding energy and food, prices increased 3% over the year and 0.2% from July to August. Inflation cooled slightly, but the prices households face remained elevated.
Mortgage costs climbed too. Freddie Mac put the average 30-year fixed-rate mortgage at 7.28%, up from 7.03% the previous week and the highest since it reached 7.29% on Nov. 22, 2023. A year earlier, the average stood at 6.34%. The average 15-year fixed-rate mortgage rose to 6.60% from 6.42%, compared with 5.55% a year earlier.
Spending Holds, but the Gains Aren’t Even
Consumer spending rose 0.9% in August from July, or 0.6% after inflation—the strongest monthly gain since March 2025. The personal consumption expenditures price index, the Federal Reserve’s preferred inflation gauge, showed price increases stabilizing as consumers kept spending. Consumer spending accounts for about 70% of the U.S. economy.
Bank of America said its customers’ card spending showed Americans were “still ramping up their discretionary spending across both goods and services,” suggesting they spent because they wanted to, “and not because they have to.” That reading contrasts with survey worries about fuel prices and persistent inflation; spending data and household confidence tell different stories.
The Commerce Department said the economy grew at a 2.2% pace from April through June, above its previous estimate of 1.5% and below the 2.5% pace from January through March. Consumer spending grew at a 3.8% annual pace in the second quarter, up from 0.7% in the first. The Associated Press reported that a strong stock market, reflecting enthusiasm about artificial intelligence, boosted wealthy investors’ resources and supported spending.
Political Salesmanship Meets the Numbers
The labor market’s openings also narrowed. The Labor Department reported 7.08 million job openings in August, down from a revised 7.34 million in July and below forecasts of 7.2 million. Layoffs fell, quits changed little and gross hiring ticked up modestly. Monthly hiring stayed below the 166,000-job average in 2023 and 2024, and well below the 491,000 a month recorded during the 2021-2022 hiring boom after COVID-19 lockdowns.
Ken Mahoney, chief executive at Mahoney Asset Management, called it a “‘low hire, low fire’ situation.” “Companies aren’t adding many people, and they aren’t laying many off either,” he said, adding that AI may be taking “a little of the edge off new hiring,” but that this was “not a wave of firings.”
The New York Times reported that President Trump called the economy strong and said the missing element was “good public relations.” He campaigned for Republicans in Alabama, Oklahoma, Texas and Washington, emphasizing economic growth, booming financial markets and increased construction. His aides pointed to a burst of construction hiring in September. Yet overall hiring cooled, wages again failed to keep pace with consumer prices, and Americans faced rising costs for gasoline, auto loans, credit cards and mortgages. Trump said his sales pitch wasn’t resonating.
The Federal Reserve’s most recent meeting included an interest-rate increase. Minutes from that meeting were due Wednesday and could shed light on the Fed’s views of inflation and the job market. Meanwhile, the Associated Press reported that lower bond yields after the jobs report helped U.S. stocks recover toward record levels: the S&P 500 rose to within 0.8% of its August record, while the Dow Jones Industrial Average and Nasdaq composite also advanced. The figures show the split: weak hiring and strained household confidence alongside a market recovering toward its record.