The bottom didn’t drop out of the labor market after a poor September U.S. jobs report. But what it did show is hiring is slow and it’s a tough time to find work.

The economy added just 29,000 new jobs last month, down from 133,000 in August.

The strong August employment report had raised hopes that the labor market was on the upswing after two years of malaise. The disappointment in September dashed those hopes, for now.

So just how good, or bad, is the jobs market?

Call it not bad — or “stable,” as senior Federal Reserve officials put it.

“August did not signal a labor-market reacceleration,” said chief economist Greg Daco of EY Parthenon, “and September does not signal labor-market deterioration.”

Here’s the good news. The economy is still adding enough new jobs to absorb most new entrants in the labor force and keep the unemployment rate low.

The U.S. needs to add about 50,000 jobs a month, economists estimate, to keep the jobless rate at or close to its current rate of 4.2%.

Well, the economy created an average of 51,000 new jobs in the past three months and 60,000 in the past 12 months. Those numbers are even larger if federal job cuts by the Trump administration are removed from the equation.

Hiring has also begun to broaden out beyond healthcare, which accounted for 95% of all new jobs in 2025.

Construction companies and manufacturers in particular have benefited from the boom in artificial intelligence. They’ve been hiring more people to build data centers and to supply the materials and manufactured goods used in construction.

A “stable” labor market might not sound exciting, but the effect has been to keep unemployment historically low.

The jobless rate stood at 4.2% in September and it’s been below 5% for five years in a row. That last time that happened was in the late 1960s.

Put another way, most Americans who have jobs are pretty secure in their jobs. That allows them to spend at levels that keep the economy growing and out of recession.

Now the bad news. Jobs are not as easy to find for young graduates or people who just got laid off.

Chief U.S. economist Bill Adams of Fifth Third Commercial Bank said his research shows the unemployment rate for recent college grads is close to 6%, an unusually high number historically.

Older people who lose jobs are also taking longer to find work and are receiving unemployment benefits for longer.

“The pace of hiring isn’t going to excite anyone — and that’s even more the case for those looking for work,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.

Why aren’t more companies hiring more people? Economists have lots of theories, but a commonly cited ailment is “uncertainty.”

The U.S. economy has been buffeted by a series of shocks in the past few years, including high and ever-changing Trump tariffs, the Iran war and rising oil prices. The result has been another surge in inflation.

Some companies are also looking to see if they can replace certain jobs, especially entry-level ones typically filled by young employees, with automation or AI. That’s another reason they have put off hiring.

Whatever the case, the softness in hiring is glaringly evident in the slowdown in wage growth. Businesses now have the upper hand on labor, a reversal of what happened during the post-pandemic recovery.

If the labor market was hot, companies would be competing more for workers and wages would be rising faster. That’s what happened after the pandemic faded away in 2021 and 2022.

Instead, wage growth has slowed. Hourly pay rose at a 3.0% pace in the 12 months ended in September, marking the smallest increase since 2019.

“Slowing wage growth even as inflation accelerates is a sign that workers are having a hard time moving up to better-paying jobs, even if outright unemployment is low,” Adams of Fifth Third said.