US Unemployment Stays Low as Job Growth Slows Before Midterms

WASHINGTON DC — The United States is heading into the November midterm elections with unemployment near historically low levels, but a weakening pace of hiring, persistent inflation and declining confidence in the economy are complicating the picture for President Donald Trump and his Republican Party.

The unemployment rate stood at 4.2% in September, a level generally associated with a labor market close to full employment. But the latest employment figures show an economy that is no longer generating jobs at the pace seen during the post-pandemic recovery, with employers becoming more cautious about hiring and workers losing some of the bargaining power they previously enjoyed.

Employers added just 29,000 jobs in September, well below the 90,000 increase economists surveyed by Reuters had expected. Payroll growth for August was also revised downward. Despite the weak hiring figures, there has been little evidence of a broad increase in layoffs, with unemployment claims remaining near historically low levels.

The labor market’s changing dynamics are creating a more complicated economic environment ahead of the November 3 elections. While Americans who have jobs continue to support consumer spending, fewer workers are finding the rapidly rising wages and abundant employment opportunities that characterized the years immediately following the pandemic.

Inflation has further weakened the benefits of wage growth. Real disposable income growth has remained below 2%, meaning that after accounting for rising prices, many households have seen only modest increases in the amount of money available for spending and saving.

The labor supply is also facing structural pressures. An aging population and lower birth rates are limiting the growth of the workforce, while tighter immigration policies have further affected the number of workers available to employers. The labor force remains below the record level reached in late 2025, according to the Reuters analysis.

Manufacturing employment presents another challenge for the administration. Trump campaigned on expanding American manufacturing through tariffs and deregulation, but manufacturing employment has so far shown limited improvement. The sector employed about 12.6 million people, roughly 21,000 fewer than when Trump took office in January 2025, according to Reuters.

The broader economy is also facing renewed inflationary pressure. The U.S. services sector expanded in September, but activity slowed slightly and the prices paid by businesses for inputs rose to their highest level in more than four years, according to an Institute for Supply Management survey reported Monday. Higher fuel and commodity costs, along with supply-chain disruptions, are adding to concerns about inflation.

The Federal Reserve is closely watching the conflicting signals. A weaker September jobs report has reduced expectations of another interest-rate increase at the central bank’s October meeting, although persistent inflation could keep another increase on the table later in the year.

For the White House, the economic record presents both strengths and vulnerabilities. The low unemployment rate provides evidence of continued labor-market resilience, but slower hiring and elevated living costs are shaping how households experience the economy.

With voters preparing to choose members of Congress in November, the distinction between a technically strong labor market and the day-to-day economic experience of households could become increasingly important. The economy continues to expand and layoffs remain limited, but the post-pandemic period of rapid hiring and strong wage gains has clearly lost momentum.

The result is an economy entering the midterm campaign with low unemployment but fewer signs of the extraordinary labor-market strength that defined the earlier recovery. For voters and policymakers alike, the central question is increasingly whether the current stability can be maintained while inflation, energy costs and slower job creation continue to put pressure on American households.