September Jobs Report Forecasts Show Moderate Hiring Gains

Forecasts call for the September jobs report to show moderate growth, continuing the trend of a cooling labor market.

This comes just two weeks after the Federal Reserve cut interest rates by 50 basis points, shifting attention from fighting inflation toward supporting the economy.

Economists predict the economy added 140,000 jobs in September, slightly below the 142,000 in August. Meanwhile, the unemployment rate is forecast to remain unchanged at 4.2%.

The September data should show a “neutral” labor market, according to José Torres, senior economist at Interactive Brokers. “Companies aren’t hiring as much, especially in the private sector,” he says.

September Jobs Report Forecast Highlights

• Job report release date and time: Friday, Oct. 4, at 8:30 a.m. EDT
• Nonfarm payroll employment is forecast to rise 140,000 vs. the 142,000 increase in August, according to FactSet.
• The unemployment rate is forecast to remain unchanged at 4.2%.
• Hourly earnings are projected to rise 0.3% monthly from 0.4% in August.

Torres predicts hiring gains will come in at 75,000, far below the consensus estimate. Additionally, he believes manufacturing, retail, information, mining, professional business services, and finance will all show net job losses for the month.

Goldman Sachs analysts are calling for a stronger report, with the recent surge in immigration driving their above-consensus forecast of 165,000 jobs added in September.

UBS economists are also calling for above-consensus gains of 180,000. Additionally, they wrote that they expect the August number to be revised upwards by 30,000, “with 15,000-20,000 of that concentrated in government employment.”

What Could the September Report Mean for the Fed?

After cutting interest rates by half a percentage point at its September meeting, the Federal Open Market Committee stated that “economic activity has continued to expand at a solid pace,” but acknowledged that job gains have cooled.

The three-month rolling average in hiring gains has declined for much of 2024, dropping 52% to 116,000 in August from 242,000 in January. “With inflation on the back burner, the Fed is looking to catch and contain that slip,” says Torres. “116,000 is too low. If we start going to 80,000 and 70,000, that will spook the market. To maintain healthy labor markets in the short term, I thought the 50-basis-point move was right.”

Bond futures contracts predict a smaller 0.25% cut in November to continue the easing cycle, according to the CME FedWatch Tool. Just one week ago, traders were predicting another 0.5% cut.