- The U.S. added just 29,000 jobs in September, and July and August were revised down by a combined 60,000 jobs, confirming a slower national hiring pace.
- Unemployment held at 4.2%, while job openings (7.1 million), hires (5.2 million), and layoffs (1.6 million) were all little changed in August.
- Small businesses still describe a tight talent market: 32% of owners report unfilled openings, and 45% report few or no qualified applicants for the roles they are trying to fill.
- Wage growth is moderating at 3.0% year over year, though employees who change jobs are still seeing 4.8% base pay gains.
- With the quit rate at 1.9%, fewer workers are leaving voluntarily, which shifts the conversation toward retention and role-specific hiring.
The September jobs report, released October 2, showed U.S. employers added 29,000 jobs, well below the pace of recent years. The more telling detail sat lower in the release: the Bureau of Labor Statistics revised July down to a loss of 10,000 jobs and trimmed August to 133,000, a combined downward revision of 60,000. For a small business owner deciding whether to post a new role this quarter, those numbers describe a labor market that has slowed considerably but has not broken.
This report summarizes the latest federal labor data alongside two surveys that look specifically at smaller employers, so you can see where the national picture and the small business picture line up and where they diverge.
The national labor market is slower and steadier than a year ago
Most of the headline indicators were described by BLS as “little changed.” Unemployment held at 4.2%, where it has hovered between 4.1% and 4.3% since March. Labor force participation stayed at 61.8%, which means the pool of available workers is not growing much. Average weekly hours for private-sector employees held at 34.4, a sign that employers are not stretching existing staff to meet rising demand.
The August Job Openings and Labor Turnover Survey (JOLTS) tells a similar story. Employers reported 7.1 million job openings and made 5.2 million hires, both roughly flat over the month and the year. Layoffs held at 1.6 million, a rate of 1.0%, so there is no sign of a broad wave of job cuts. The overall picture is a market with lower churn: fewer people moving, fewer roles being added, and relatively stable employment for those already working.
| Indicator | Latest reading | What the release says |
| Nonfarm payroll employment | +29,000 (Sept.) | Little changed; July and August revised down 60,000 combined |
| Unemployment rate | 4.2% | Has held between 4.1% and 4.3% since March |
| Labor force participation | 61.8% | Little net change since January |
| Average hourly earnings | $37.81 (+3.0% YoY) | Pay is still rising, at a more moderate pace |
| Average weekly hours (private) | 34.4 | Unchanged from August |
| Job openings | 7.1 million (4.3%) | Little changed in August |
| Hires | 5.2 million (3.3%) | Little changed over the month and the year |
| Quits | 3.1 million (1.9%) | Unchanged; workers are staying put |
| Layoffs and discharges | 1.6 million (1.0%) | Little changed; no broad layoff wave |
Sources: BLS Employment Situation, September 2026 (released Oct. 2, 2026); BLS JOLTS, August 2026 (released Sept. 29, 2026).
Small business hiring is cooling, but finding qualified people is still hard
National data covers employers of every size, so it helps to look at sources that isolate smaller firms. The ADP National Employment Report for September counted 90,000 private-sector jobs added overall, with small establishments (1 to 49 employees) adding 23,000. Most of that came from the smallest businesses, those with 1 to 19 employees, which added 18,000. Mid-sized establishments (50 to 499 employees) led all size groups with 54,000 new jobs.
JOLTS also offers a size breakdown, and it points in a cooler direction for the smallest employers: the job openings rate decreased at establishments with 1 to 9 employees in August, while the largest employers saw little change.
Survey data from the National Federation of Independent Business (NFIB) adds the owner’s perspective. In its September jobs report, 32% of small business owners said they had job openings they could not fill, and a net 17% plan to create new jobs over the next three months. Among owners who were hiring or trying to hire, 45% reported few or no qualified applicants. NFIB Chief Economist Bill Dunkelberg summarized it this way: “Overall employment conditions are softening, though the small business labor market is still tighter than normal.”
That gap between a cooling national market and a still-tight small business market matters. Smaller employers often compete with larger organizations for the same skilled candidates without the same employer brand or recruiting infrastructure, so a softer macro environment does not automatically translate into an easier search for every role.
Wage growth is moderating, but changing jobs still pays
Average hourly earnings reached $37.81 in September, up 3.0% from a year earlier, a more moderate pace than the wage spikes of the post-pandemic years. ADP’s pay data shows a similar trend for people who stay in their jobs, with base pay up 3.0% year over year. Workers who changed jobs, however, saw base pay increases of 4.8%.
Small business owners are still adjusting pay. NFIB reported that a net 28% of owners raised compensation in September and a net 20% plan to raise pay in the coming months. For employers setting budgets for next year, the data suggests continued wage increases at a steadier rate, with the largest premiums still attached to candidates who are being recruited away from another employer.
Fewer workers are quitting, which reshapes the retention picture
Quits held at 3.1 million in August, a rate of 1.9%. The quit rate is one of the clearest signals of worker confidence, because people tend to leave voluntarily when they believe a better opportunity is easy to find. A rate below 2% indicates that many employees are choosing stability.
For small businesses, lower turnover can mean fewer unplanned vacancies and lower replacement costs. It also means the candidates you most want to hire may be less actively looking, since strong performers in a cautious market often stay where they are unless a role offers a clear step forward. Many employers are responding with more targeted professional recruitment for critical roles, rather than relying on job postings alone.
Industry snapshot: where jobs moved in September
Hiring was concentrated in a handful of sectors, while most industries showed little movement.
- Health care added 17,000 jobs, led by ambulatory health care services (+13,000) and hospitals (+12,000), partly offset by a 9,000-job decline in nursing and residential care facilities. Growth continued, though at a slower pace than its 12-month average.
- Construction added 11,000 jobs, in line with its modest trend over the past year.
- Manufacturing added 9,000 jobs and is up 72,000 since a recent low in December 2025.
- Financial activities lost 7,000 jobs and is down 129,000 since May 2025, with most of the decline among insurance carriers.
- Professional and business services, retail, leisure and hospitality, transportation and warehousing, and information were all described as little changed.
Industry patterns can look very different at the local level. A small manufacturer in a market with several large plants, or a professional services firm competing with a regional headquarters, may experience far more competition for talent than the national figures suggest. State and metro data from BLS is a useful next layer when planning hiring in a specific location.
What to watch in the next round of labor market data
A few indicators will show whether this slowdown is leveling off or continuing. Revisions have been consistently downward in recent months, so the next report’s updates to September will be worth noting. The quit rate will signal whether workers remain cautious heading into year-end. And NFIB’s share of owners with unfilled openings will show whether small businesses continue to feel a tighter market than the national averages suggest. The next Employment Situation and JOLTS releases are expected in early November.
