US September jobs growth slows sharply to 29,000; unemployment rises to 4.2%

US employers added just 29,000 jobs in September, well below market expectations, while the unemployment rate rose to 4.2%, pointing to a softer labour market ahead of the Federal Reserve’s next policy decision.The latest data from the US Bureau of Labor Statistics showed that non-farm payrolls increased by 29,000 last month, compared to a Bloomberg expectation of job additions of around 90,000. The September report also brought downward revisions to earlier employment data.

Job gains for July and August were revised lower by a combined 60,000. August employment was revised to 133,000 from the earlier estimate of 162,000. The unemployment rate increased to 4.2% from 4.1% in August. The rate has remained within a relatively narrow range of 4.1% to 4.3% since March, indicating that unemployment remains low even as hiring has weakened.The September report is the final monthly employment reading before the November midterm elections and will also be closely watched by financial markets for clues about the Federal Reserve's interest-rate path.The weak hiring numbers could add to pressure on the Fed to avoid further rate increases, although policymakers have continued to focus on inflation as a key concern.US stock futures extended gains after the data.

Dow futures were up about 439 points, or 0.85%, while S&P 500 futures gained 0.79%. Nasdaq 100 futures rose 1.01%. ReutersTreasury yields moved lower as traders reduced expectations of another rate increase. The 10-year Treasury yield fell to around 5.18%, while the two-year yield dropped to about 4.72%. The two-year yield, which is particularly sensitive to expectations for Fed policy, has seen a sharp decline following the jobs report.Oil prices also eased.

Brent crude slipped below $100 a barrel, extending its decline as markets weighed the employment data alongside developments in West Asia and potential additional crude and diesel stock releases in Europe.