U.S. Job Market Shows Signs of Cooling but Job Additions Still Solid

U.S. job growth slowed for a second straight month in September, but job additions remain well above pre-pandemic norms.

Roughly 263,000 employees were added to payrolls in September 2022, according to the Bureau of Labor Statistics (BLS). That was the smallest monthly gain the nation has recorded since April 2021, but it was well above the average of around 190,000 jobs added each month from 2015 to 2019. Upward revisions to July showed 11,000 more jobs were added than previously reported, up from 526,000 to 537,000 jobs. The August job growth number remained unchanged with a gain 315,000 jobs. As of September, the U.S. economy had 514,000 more jobs (+0.3%) compared to the pre-pandemic employment level from February 2020. Meanwhile, the U.S. unemployment rate edged down to 3.5% in September, 20 basis points (bps) below the August showing.

Jobs by Industry

Job change performances by major industries in September were varied. The biggest job gains occurred in Education and Health Services (+90,000) and Leisure and Hospitality Services (+83,000). On the other hand, Government (-25,000) and Financial Activities (-8,000) suffered notable job losses from August to September.

•The Education and Health Services industry’s monthly gain of 90,000 jobs was largely in the health care and social assistance sector (+75,400), with much of that gain in health care (+60,100). The social assistance subsector added 15,300 jobs. Meanwhile, the educational services sector added 14,300 jobs in September. Total employment in Education and Health Services is now 47,000 jobs, or 0.2%, higher than in February 2020.

•Among the Leisure and Hospitality industry’s monthly gain of 83,000 jobs, most were in the food services and drinking places subsector (+60,000). The arts, entertainment and recreation sector added 16,300 jobs for the month, with sizable gains in the amusements, gambling and recreation subsector (+12,700). Despite recent gains, the Leisure and Hospitality Services employment in this sector is still below its pre-pandemic employment count by more than 1.1 million workers.

•The Professional and Business Services industry gained 46,000 jobs in September with most of those in the lower-paying administrative and waste services sector (+31,600) The professional and technical services sector added 10,700 jobs, with the accounting and bookkeeping subsector accounting for 7,300 of those jobs. The legal services and advertising and related services subsectors each lost around 5,000 jobs during the month. As of September, Professional and Business Services had nearly 1.1 million more jobs than in February 2020.

•The Manufacturing industry posted a net gain of 22,000 jobs in September, with durable goods adding 16,000 jobs and nondurable goods adding 6,000 jobs. Among durable goods manufacturing, job gains were mainly in motor vehicles and parts (+8,300) and fabricated metal products (+6,300). Job gains in nondurable goods manufacturing were mainly in food manufacturing (+7,800), while notable job loss was seen in printing and related support activities (-4,000). Employment in Manufacturing overall is now 95,000 jobs, or 0.7%, above the February 2020 level. 

•The Construction industry added 19,000 jobs in September with a gain of 17,700 jobs in the specialty trade contractors sector. The construction of buildings sector added 2,300 jobs during the month. As of September, construction employment is up by 95,000 jobs, or 1.2%, compared to February 2020 levels. 

•The Other Services sector added 17,000 jobs in September. The largest contributions to that total were from the personal and laundry services (+8,000) and repair and maintenance (+7,600) sectors, while membership associations and organizations added 1,500 jobs. Despite recent job gains, the Other Services sector remains 232,000 jobs, or 3.9%, below the February 2020 level.

•The Information industry added 13,000 jobs in September, with the majority of those gains in the publishing industries, except Internet (+5,600) and motion picture and sound recording industries (+5,200) sectors. Job losses were recorded in the telecommunications (-1,700) and broadcasting, except Internet (-1,000) sectors. The Information industry overall is 140,000 jobs, or 4.8%, above February 2020 levels.

•The Trade, Transportation and Utilities industry posted a net gain of just 3,000 jobs in September. Job gains in wholesale trade (+11,300) were nearly wiped out by losses in transportation and warehousing (-7,900) and retail trade (-1,100). Utilities was up just 200 jobs for the month. Overall employment in Trade, Transportation and Utilities is 990,000 jobs, or 3.6%, above the February 2020 level.

•The Mining and Logging industry gained roughly 3,000 jobs in September, with most of that net gain in Mining (+2,600). Logging gained just 300 jobs during the month. As of September, the Mining and Logging industry was 53,000 jobs, or 7.7%, below the February 2020 employment level.

•The Financial Activities industry lost 8,000 jobs, on net, in September. The bulk of that loss was in the finance and insurance sector (-13,000), with the insurance carriers and related activities subsector losing 9,300 jobs. On the other hand, the real estate and rental and leasing sector gained 5,000 jobs. Despite the recent job losses, the Financial Activities industry overall is 87,000 jobs, or 1.0%, above February 2020 levels.

•The Government sector lost 25,000 jobs in September. Most of that net job loss was in State Government (-16,000) and Local Government jobs (-11,000). The Federal Government sector added 2,000 jobs for the month. With the recent job losses, the Government sector is about 597,000 jobs, or 2.6%, below the February 2020 level.


The unemployment rate (U3 or headline unemployment rate) in September ticked down 20 bps from August to 3.5%, one of the lowest levels since 1969. The unemployment rate has not fallen below 3% since 1953. 

As of September, the number of unemployed persons edged down to roughly 5.75 million.

The unemployment rate for adult men decreased 20 bps from August to 3.3% in September. The unemployment rate for adult women also decreased 20 bps, dropping to 3.1%. But the unemployment rate for teenagers increased, climbing 100 bps from 10.4% in August to 11.4% in September.

Across most major industries, unadjusted unemployment rates decreased from August to September. The biggest drop was in Government, which was down 100 bps to 1.8%. On the other hand, unemployment increased in only one industry – Wholesale and Retail Trade – up 30 bps to 4%.

The highest industry unemployment rates (not seasonally adjusted) in September were in Leisure and Hospitality Services (5.9%), Transportation and Utilities (4%) and Wholesale and Retail Trade (4%). The lowest unemployment rates were in the Financial Activities (1.3%) and Government (1.8%) sectors. 

The number of unemployed persons that quit or voluntarily left their previous job to begin looking for new employment increased from 898,000 in August to 905,000 in September. The number of unemployed for 27 weeks or longer dropped from 1.14 million in August to 1.07 million in September and accounted for 18.5% of all unemployed persons. The number of those working part-time that would prefer to work full-time decreased from 4.1 million in August to about 3.8 million in September, while the number of workers who prefer part-time positions ticked up from around 20.7 million in August to around 20.9 million in September. 

The U6 unemployment rate (seasonally adjusted), which includes part-timers for economic reasons and marginally attached workers decreased to 6.7% in September and was well below the 8.5% rate a year earlier. 

Labor Force Participation 

The civilian labor force participation rate decreased 10 bps, moving from 62.4% in August 2022 to 62.3% in September 2022. That recent rate is still below pre-pandemic levels which averaged 63.1% in 2019. Meanwhile, the employment-population ratio remained unchanged from August, registering at 60.1% in September. 

Workers marginally attached to the labor force increased by about 166,000 from August to 1.6 million in September, while the number of discouraged workers stood at 485,000, up 119,000 month-over-month. Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months.

Average Hourly Earnings

Average hourly earnings among employees on private nonfarm payrolls rose $0.10 from August to September. That monthly increase took average hourly earnings to $32.46 in September. On an annual basis, average hourly earnings were up $1.54, a 5% increase year-over-year. However, wages were outstripped by inflation, as the Consumer Price Index (CPI) rose 8.3% in the year-ending August.  

Industry wage growth varied greatly. Among major industries, Leisure and Hospitality Services led with average hourly wages jumping 7.9% year-over-year in September, as competition for restaurant and other service workers has had a dramatic effect on wage growth. Information workers enjoyed a 7.2% annual increase in hourly wages, followed by Construction with 5.5% growth. On the other hand, the smallest annual increase in hourly wages was seen among Other Services employees (2.7%).


The percentage of workers that telework has been falling as many companies are welcoming workers back into the office. September’s teleworking rate of 5.2% was down from 6.5% the prior month and well below the 35.4% rate recorded in May 2020, according to the BLS’s supplemental data measuring the effects of the coronavirus pandemic on the labor market. The metric does not include employees who worked from home prior to the pandemic. The rate of teleworking will likely continue to remain elevated compared to historical norms as employers discover that remote working can act as a hiring and retention inducement that boosts employee morale while productivity remains close to previous levels.