Wall Street braces for the Bureau of Labor Statistics to release its September nonfarm payrolls report on Friday at 8:30 a.m. Eastern time.
Economists polled by Dow Jones expect job growth of 84,000 for the month, with the unemployment rate holding steady at 4.1%.
The expected payrolls figure marks a notable downshift from trends seen before 2025, though the jobless rate remains near levels historically associated with full employment.
The September data follows a surprisingly strong August gain of 162,000 jobs, which also included upward revisions to previous months.
Fed Vice Chairman Philip Jefferson addressed the labour market in a speech on Thursday, offering a measured but broadly positive assessment of current conditions.
“In the labor market, a broad range of data indicates that conditions have stabilized,” Jefferson said, adding that payroll gains have broadened across many sectors and that layoffs have remained low.
New York Fed President John Williams struck a similar tone earlier in the week, saying “there is no need for urgency” when considering whether to follow September’s quarter-point rate hike with another increase.
“On the employment side of the Fed’s twin goals of full employment and stable prices, the data show that the labor market continues to be solid — and has even strengthened a bit on the margin,” Williams said.
Markets responded by sharply reducing the odds of a rate hike at the October 27-28 meeting, with investors now pricing a move as more likely in December.
Payroll growth has averaged 80,000 jobs per month across 2026, though the figures have been erratic, ranging from a loss of 156,000 in February to a gain of 214,000 the following month.
Wage growth has also moderated, with average hourly earnings expected to show a 3.1% year-over-year increase in September, down from around 4% at the start of the year.
Fed officials have stressed that wages are not a significant driver of inflation, pointing to the absence of a wage-price spiral as a key factor in their policy deliberations.
Despite the broadly stable picture, worker confidence remains fragile, with the latest Glassdoor survey showing employee sentiment fell to a record low in September for the third time this year.
Daniel Zhao, Glassdoor’s chief economist, attributed the slide to growing “anxiety around job security, economic uncertainty and inflation mount,” with workers also citing fears around artificial intelligence displacing jobs.
Layoffs, however, remain historically low, with first-time unemployment insurance claims edging down to 197,000 last week, offering some reassurance to policymakers.
Job placement firm Challenger, Gray and Christmas reported Thursday that layoffs in September fell 18% from August and 20% compared with the same period a year ago.
Dan North, senior economist at Allianz Trade, summed up the mood plainly: “You have that unemployment rate which doesn’t move much, and it’s really important to see that historically it’s pretty low.”
“Job openings are going down, hiring’s kind of creeping down, and you find out that anecdotally, anyway, and also in the data, that it’s very hard for people to get a new job,” North added.
“So, I think you’re seeing a job market that is — ‘stable’ is a really good word for it,” North concluded, capturing the central tension facing Fed officials as they calibrate their next policy move.