What to expect from the September jobs report

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All eyes will be on the September jobs report when it is released Friday morning as investors look for clues about the labor market's health in the face of higher interest rates and sticky inflation.

The Labor Department's high-stakes September payroll report, due at 8:30 a.m. ET, is projected to show that hiring increased by 170,000 last month and that the unemployment rate ticked down to 3.7%, according to a median estimate by Refinitiv economists.

That would mark a drop from the 187,000 gain in August and the 271,000 monthly average recorded over the previous 12 months. However, it is slightly above the average pre-pandemic monthly increase.

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Construction workers are seen on a job site in Miami on May 5, 2023. (Joe Raedle/Getty Images / Getty Images)

«While job growth likely showed resilience in September, the jobs report is poised to reveal some cooling beneath the surface with private sector hiring downshifting and wage growth slowing further,» said Lydia Boussour, EY senior economist.

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Boussour said she anticipates that private-sector job growth will continue to moderate in September due to more cautious hiring and slower gains in the health care and leisure and hospitality sectors. However, she noted that a likely burst in hiring by the government – the result of teachers returning for the start of the school year – will help to elevate the headline figure.

The Federal Reserve is closely watching the report for evidence that the labor market is finally softening after