The September 2026 Employment Situation report provides new evidence that the U.S. labor market is weakening, with implications for Black workers and Black and minority-owned businesses.
The Bureau of Labor Statistics reported that total nonfarm payroll employment increased by only 29,000 jobs in September, while the national unemployment rate edged up to 4.2 percent. Employment was essentially unchanged across every major industry.
Even more significant were revisions to prior months. July payroll growth was revised from +21,000 to -10,000, while August was revised from +162,000 to +133,000. Combined, employment in July and August was 60,000 jobs lower than previously reported.
CIR previously warned that the initially reported August payroll increase of 162,000 appeared unusually strong and could be revised downward. The figure has now been reduced to 133,000.
Black Unemployment Rises Sharply
The most troubling development in the September report was the increase in the Black unemployment rate from 6.0 percent in August to 7.0 percent in September.
By comparison, unemployment was 3.6 percent for White workers, 4.7 percent for Hispanic workers, and 2.9 percent for Asian workers.
The increase should not be interpreted simply as a collapse in Black employment. Black labor-force participation increased sharply during the month, and Black employment also rose modestly. The larger problem is that the Black labor force expanded much faster than employment, meaning the economy did not generate enough jobs to absorb workers entering or returning to the labor market.
“The rise to 7.0 percent is a warning sign,” Cunningham said. “More Black Americans are looking for work, but the economy is not creating enough employment opportunities to absorb them.”
Private-Sector Hiring Remains Weak
Health care added approximately 17,000 jobs, construction added 11,000 and manufacturing added 9,000, while financial activities lost approximately 7,000 jobs. Most other major industries showed little change.
Financial-sector employment is now down approximately 129,000 jobs since May 2025, including substantial losses in insurance and related activities.
Wage growth also cooled. Average hourly earnings increased only 0.1 percent in September and were up 3.0 percent over the previous 12 months.
For Black and minority-owned businesses, weakening employment and wage growth can translate into softer consumer demand at the same time firms continue to confront high borrowing costs, elevated operating expenses, and uncertainty surrounding government and corporate contracting.
Revisions Raise Questions About the Headline Numbers
Three figures summarize the September report:
Payroll growth: +29,000
Black unemployment: 7.0 percent
Downward revisions to July and August: -60,000 jobs
“The labor market has clearly lost momentum,” Cunningham said. “The key questions now are how much further the slowdown will go.”
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