MBA Chart of the Week: Monthly Payroll Growth
Source: Bureau of Labor Statistics
According to September’s Employment Situation report from the Bureau of Labor Statistics, the job market was somewhat weaker in September, with payrolls up only 29,000, and the prior two months revised down by 60,000 jobs. In 2026 to date, payroll gains averaged 68,000 jobs per month, stronger than 2025’s growth, but still not an indication of a robust job market. The unemployment rate ticked up to 4.2%, largely because more people actively looked for work. Wage growth slowed further to a 3% rate.
The diffusion index, which measures the share of sectors that show job growth each month, was 49 in September, down from a 57.6 reading in August. This was the lowest level since December 2025. The three sectors that have contributed most of the job growth in recent months, health care, hospitality, and government, showed slower growth in September. The financial sector continues to lose jobs at a slow pace, while construction jobs are increasing, particularly in nonresidential construction. With inflation still too high, the Federal Reserve is unlikely to cut rates anytime soon.
However, these data showing a softer job market may be enough to keep the Fed on hold at their October meeting. Wage growth at 3% continues to run below the pace of inflation, which will hamper consumer spending over time. August data on PCE inflation showed 3.4% growth in inflation over the past 12 months, while core PCE, which excludes food and energy, grew 3%. Households continue to be impacted by higher energy prices through higher gasoline prices, more expensive goods as transportation costs increase, and higher airfares.
