The U.S. unemployment rate in September rose from 4.3 to 4.4 percent, the highest mark since 2021, according to a report released by the Bureau of Labor Statistics (BLS). The report was due to be released in October, but was delayed due to a record-breaking 43-day government shutdown.
Unemployment increased even as job growth outperformed expectations. Non-farm payroll jobs increased by 110,000, above projections for an increase of 50,000. The mismatch is at least partly caused by a significant downward revision in total jobs created in the 12 months preceding March 2025—the BLS revised their estimates of non-farm payroll positions down by 910,000, revealing a weaker job market than previously anticipated.
According to economists consulted by Reuters, some of the weakness in the job market is caused by artificial intelligence reducing demand for college graduates and entry-level workers, contributing to a particularly difficult labor market for young people, who are already hurting from high costs of housing.
A weaker job market may influence the December 9–10 meeting of the Federal Reserve Board, which must decide whether to cut interest rates again this year. The board will not have information from the November BLS report, which also has been delayed due to the government shutdown.
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