Jobs Report Beats Expectations, Handing Trump Big Win

The Labor Department finally released its long-delayed September employment report on Thursday, offering the first clear snapshot of the U.S. job market after President Donald J. Trump’s second-term standoff with a dysfunctional, shutdown-prone federal bureaucracy. The 40-day shutdown—triggered by Congress’ failure to fund basic government operations—pushed the report’s publication well past its scheduled release date.

Despite the Washington chaos, the economy added 119,000 jobs in September, outperforming Wall Street estimates, according to CNBC. Yet the broader picture shows an economy weighed down by structural weaknesses and the lingering aftershocks of Biden-era inflation.

The Bureau of Labor Statistics confirmed it will not issue an October report due to the shutdown’s disruption. September’s unemployment rate ticked up slightly to 4.4%, compared with 4.3% in August.

The report also delivered revisions that expose just how sluggish the labor market had been during the late-summer period. July’s job creation was cut from 79,000 to 72,000, and August’s numbers flipped dramatically—from a reported gain of 22,000 to a loss of 4,000. Combined, July and August employment levels were 33,000 jobs lower than previously believed.

Government payrolls climbed by 22,000 positions last month, reversing an identical decline in August. State governments added 16,000 jobs and local governments brought on 9,000 workers, while the federal government shed 3,000. According to BLS, federal employment has dropped by 97,000 jobs since peaking in January—a sign of ongoing reform efforts and inefficiencies being corrected. The agency noted that federal employees on paid leave or receiving severance are still counted as employed.

Manufacturing, still battered from years of offshoring and supply-chain distortions, lost 6,000 jobs in September—slightly better than economists’ predictions but part of a broader 94,000-job decline over the past year. In contrast, healthcare continued its rapid expansion, adding 42,800 jobs, largely through ambulatory care services (+23,300) and hospitals (+16,400).

Food service employers added 36,500 positions, while the social assistance sector grew by 14,300 jobs. Transportation and warehousing, however, suffered a sharp contraction of 25,300 jobs, with major cuts in warehousing (-10,700) and courier services (-6,700).

Labor force participation held at 62.4%, barely changed over the past year, and the employment-population ratio stayed at 59.7%, down 0.4 percentage points from a year ago. Long-term unemployment remained fixed at 1.8 million, accounting for roughly a quarter of all unemployed Americans. Part-time workers stuck in reduced hours totaled 4.6 million, while the number of Americans working multiple jobs rose by 17,000 and now represents 5.4% of the workforce.

The report lands as the Federal Reserve weighs whether to issue a third straight interest-rate cut in December, even as inflation remains stubbornly above its 2% target. Fed officials cut rates by a quarter point in both September and October, citing ongoing weakness in the labor market—an unmistakable indicator of the economic fragility inherited from the previous administration.

Oxford Economics’ Nancy Vanden Houten argued that the data shows the job market had not collapsed prior to the shutdown, saying the “September jobs report may be backward-looking but offers reassurance that the labor market wasn’t crumbling before the government shutdown. There is nothing in the data to warrant a chance to our forecast for the Federal Reserve to leave rates unchanged at the December meeting.”