U.S. nonfarm payroll employment grew by 29,000 in September, and the unemployment rate rose to 4.2 percent, according to the Bureau of Labor Statistics. The consensus forecast called for 84,000 jobs and for unemployment to hold at 4.1 percent. September's reading was far below consensus and unemployment ticked up to 4.2%, above consensus for an unchanged 4.1%. The U.S. added fewer jobs than expected in September and wage growth slowed; nonfarm payrolls increased only 29,000 and average hourly earnings edged up a weaker-than-expected 0.1% from August and rose 3% compared with a year earlier, the slowest annual wage growth since 2021.
Treasury yields tumbled Friday after the weaker-than-expected jobs report, as investors reassessed the outlook for a Federal Reserve rate hike this month. The Dow Jones Industrial Average rose 0.5%, the S&P 500 gained 0.7%, and the tech-heavy Nasdaq Composite surged 1.2% after touching an intraday record high during the session. Nvidia reached a new all-time intraday high of $237.88, pushing its market capitalization past $5.7 trillion as investors continued to pile into AI.
The labor market is stuck in low-hiring mode and drivers of job growth are shifting; education, which typically provides a big September boost, turned to a drag as state and local governments face a budgetary squeeze, and that mix doesn't strengthen the case for another rate hike, with the Fed expected to hold rates steady for the rest of the year. The soft data removes near-term pressure on the Federal Reserve to raise rates at its October 27-28 meeting, a shift that has bolstered financial markets and eased borrowing concerns for small and mid-sized businesses.
The Group of Seven nations have agreed to release 100 million barrels of oil over four months, including a substantial amount of diesel within the first 20 days, as fuel prices in the United States remain near record levels. The national average for a gallon of diesel in the U.S. was $6.37 on Friday, after hitting a record $6.52 on Sept. 22. Oil prices softened after the announcement, with Brent crude trading 1.48 per cent lower at $100.8 per barrel, while West Texas Intermediate traded 2.66 per cent lower at $90.40 per barrel.
Inflation Rate in the United States remained unchanged at 3.40 percent in August, with expectations for 3.70 percent by the end of this quarter. Core consumer prices in the United States increased 2.40 percent in August of 2026 over the same month in the previous year. Average hourly earnings rose 3% compared with a year earlier, the slowest annual wage growth since 2021 and probably trailing inflation for the sixth consecutive month.
David Robinson, a leader on OpenAI's Safety Systems team, resigned last week, becoming the latest safety-focused figure to leave the ChatGPT maker as scrutiny of its practices grows. His exit follows that of Johannes Heidecke, OpenAI's safety head, who left earlier this year. Robinson worked on safety and transparency, including helping to develop and publish system cards that provide information about OpenAI's models.
Meta unveiled Muse for Small Business that connects its agent to popular software from companies like Asana, Zoom, Intuit, Box, Canva and Salesforce's Slack, and the agent can also link to Meta ad accounts and professional Instagram and Facebook profiles. Meta announced that it's expanding its AI agent Muse to small businesses and adding new integrations, including Shopify, Dropbox, Slack, and the tech giant says the agent can help owners run their business and find new customers.
Two-thirds of small businesses now use AI, up 8 points from 2025 and nearly 3 times the share using it in 2023. Inflation continues to be the top small business challenge, cited by 32% and up 9 points from 2025. The business happiness score held at a weighted average of 3.97 out of 5 for the second consecutive year, with a combined 74.6% reporting feeling somewhat or very happy as business owners.
Friday's weak jobs report materially changes the interest rate trajectory for 2026. The data doesn't strengthen the case for another rate hike, with the Fed expected to hold rates steady for the rest of the year. For owners carrying variable-rate debt or planning to refinance, this is a turning point: instead of facing another 50 basis points of increases, rates are likely to remain stable through year-end. The current effective federal funds rate is 3.88%, a level that has already priced in caution. Lock in any refinancing plans now if you have floating-rate obligations, and update your 2027 cash-flow projections with the assumption of stable borrowing costs.
On the operational front, the weakening labor market merits your attention. Ambulatory health care services added 13,000 jobs and hospitals added 12,000 jobs, while construction changed little with 11,000 jobs. If you operate in construction, manufacturing, or services, labor availability may shift in your favor as hiring pressures ease. At the same time, AI adoption is no longer a future concernu2014it's now. High-rate technology adoption is accelerating, with 41% of small businesses now using 6+ platforms, up 9 points from 2025 and nearly 3 times the 2022 level. The competitive edge increasingly goes to operators who deploy AI for routine tasks, not those debating whether to use it.