After an unexpectedly strong jobs report in August, employers created fewer jobs in September than economists had forecast. The Labor Department said Friday that the economy added 29,000 jobs last month, lower than the 90,000 expected. Revisions to the previous two months found 60,000 fewer jobs than were created than previously reported.

The unemployment rate rose slightly to 4.2% from 4.1%.

“The US labor market delivered more of the same in September,” wrote Cory Stahle, senior economist at Indeed. “Steadiness without a spark.”

The slowdown in hiring last month gives the Federal Reserve room to wait and see how the economy is faring before taking any further steps.

“A report like this may make some committee members hesitant to rasie rates again in October,” Stahle said. “The labor market is still aloft, but it’s unclear how long it can keep circling while it waits for inflation to clear the runway.”

Markets opened higher Friday. The S&P 500 rose over 1%, with the Dow Jones Industrial Average up about 0.7%. The tech-heavy Nasdaq jumped about 1.5%

Friday’s release is the last jobs report before the midterm elections, as Republicans fight to maintain their majorities in the House and Senate. Voters are pointing to higher gas and grocery prices driven by President Donald Trump’s tariffs and war with Iran as a reason for their dissatisfaction with Republican candidates.

Nationwide, the average gallon of gasoline is nearly $4.40, nearly 40% higher compared to a year ago, according to AAA. The pain is exacerbated by wage increases that have not kept up with inflation. Compared to a year ago, average hourly earnings for private sector employees rose by 3%.

For the past several months, unemployment has been consistently low, but that’s because more people are leaving the labor force than finding a job. It’s a subject that has some economists scratching their heads. Are more people retiring? Is it a shortage of immigrant workers as many are being denied visas to work in the United States? Are people giving up on finding a job and simply leaving the workforce? Is it a statistical issue?

In September, that trend reversed itself slightly as more people returned to the workforce, matching the rate in May. With more people looking for work, that pushed up unemployment slightly.

Friday’s jobs numbers come a day after the Commerce Department reported the economy grew 2.2% in the second quarter of this year, more than previously reported, but slower than the 2.5% growth in the first part of the year.

As for who is finding work, many jobs are in lower-paying industries, like healthcare, where 17,000 new jobs were created overall. Artificial intelligence is also creating and cutting jobs. The construction and manufacturing sector saw an increase in hiring as companies build data centers. At the same time, jobs at risk of being replaced by AI, like those in finance, lost 7,000 jobs.

The White House touted the report.

“In September, the private sector added jobs, and labor participation rose, while President Trump has shrunk the federal bureaucracy to the lowest levels since the 1960s,” White House spokesperson Taylor Rogers said.

The September unemployment numbers support theFed’s recent decision to prioritize lowering inflation over stimulating job growth by raising interest rates.

In its statement announcing the rate hike at its last meeting, the central bank wrote, “Economic activity is expanding at a solid pace” and that “job gains have kept pace with the workforce, and the unemployment rate has changed little.”

Friday’s report still clears the way for the Fed to raise rates again. The question is when: at its next meeting, less than a week before the midterm elections, or when the bank holds its last meeting of the year in December?

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