Victor Moreno (C) of Jiffy Lube Inc. speaks to people about job opportunities at the Mega Job News USA South Florida Job Fair at Amerant Bank Arena on September 25, 2026 in Sunrise, Florida.
Joe Radle | Getty Images
Persistent questions about the state of the U.S. labor market may be answered Friday when the Bureau of Labor Statistics releases September nonfarm payrolls numbers.
Wall Street is aiming for 84,000 jobs to end the summer with the unemployment rate remaining at 4.1%, according to the Dow Jones Consensus.
While the top line in payrolls shows a decline from pre-2025 trends, the unemployment rate, which is closely watched by Federal Reserve officials, is near levels that indicate full employment.
The September announcement follows an astonishingly large increase of 162,000 cases in August, and the month-on-month figure was also revised upward.
Fed officials will likely focus on numbers to confirm the strength of the labor market, while also turning their attention to the more troubling inflation picture.
“A wide range of data shows that conditions in the labor market are stabilizing,” Fed Vice Chairman Philip Jefferson said in a speech Thursday. “Job creation has been a bit erratic, but pay increases have spread across many sectors in recent months, which is encouraging. Layoffs remain low and the number of job openings has increased slightly in net terms.”
Despite the strong employment situation, the Fed’s commentary this week changed market expectations for a rate hike near the end of October.
New York Fed President William Williams said earlier this week that there is “no need to rush” as policymakers consider whether to raise rates further by a quarter of a percentage point in September.
“On the employment side (of the Fed’s twin goals of full employment and price stability), the data shows that the labor market remains strong and even strengthened slightly on the margins,” Williams said.
The market then significantly lowered the chances of a rate hike at its October 27-28 meeting, making it much more likely that a rate hike will occur in December.
slowly but steadily
Central to the argument that the Fed needs to focus on inflation but is in no hurry to raise rates further is the modest but stable labor situation.
Employment growth in 2026 averaged 80,000 per month, but it was volatile, with hits and misses ranging from a decline of 156,000 jobs in February to an increase of 214,000 jobs the following month.
Wage growth is also slowing, with average hourly wages expected to rise 3.1% year-on-year in September, down from about 4% at the beginning of the year. Fed officials have emphasized that wages are not a significant driver of inflation and that the lack of evidence of a wage-price spiral is a key distinction when adjusting policy.
Still, there are concerns about the state of the labor market.
According to the latest Glassdoor survey, employee confidence fell to an all-time low in September, the third time this year. Daniel Chao, the job site’s chief economist, said the concerns come amid “heightened concerns around job security, economic uncertainty and inflation.”
Workers also cited fear of artificial intelligence.
But the number of layoffs remains low, with the number of new jobless claims dropping slightly last week to 197,000, according to the latest data. Employment agency Challenger, Gray & Christmas reported on Thursday that layoffs were 18% lower in September than August and 20% lower than the same period last year.
“The number of job openings is decreasing, employment is gradually decreasing, and we know anecdotally and from the data that it’s very difficult for people to get new jobs,” said Dan North, senior economist at Allianz Trade. “The unemployment rate hasn’t fluctuated much, but it’s very important that historically it’s been pretty low. So I think the job market is stable. ‘Stable’ is the right word.”
