Manufacturing Adds 9,000 Jobs in September 2026 Employment Report

Manufacturing added 9,000 jobs in September 2026, a 400% increase from the same month a year ago. The broader economic picture was less robust, with the national unemployment rate climbing to 4.2% as the economy added only 29,000 nonfarm payrolls, well below expectations. The manufacturing gains were concentrated in specific areas. The plastics and rubber products sector added 5,000 jobs, while machinery manufacturing added 4,500. These increases were partially offset by losses elsewhere, including a drop of 2,600 jobs in the paper sector. Overall manufacturing unemployment fell sharply, dropping to 423,000 workers from 571,000 a year prior-a decrease of nearly 26%.

Sectoral dynamics

Performance within manufacturing was uneven. Six industries reported employment decreases in September: textile mills, printing and related support activities, petroleum and coal products, paper products, food, beverage and tobacco products, and chemical products. Only the computer and electronic products and transportation equipment segments reported higher employment. The Institute for Supply Management's Purchasing Managers' Index reflected this cautious expansion, with its manufacturing employment index rising to 52.7% in September, up 1.5 percentage points from August. An index above 50.3% is generally consistent with growth in government jobs data. Susan Spence, chair of ISM's Manufacturing Business Survey Committee, noted the hiring climate. "The panelist comment ratio of hiring to managing/reducing head counts was 1.5-to-1," she said. Scott Paul, president of the Alliance for American Manufacturing, viewed the trend positively. "Manufacturing's slow but steady job growth since the beginning of the year has been a real bright spot," he stated.

The monthly gains, however, showed volatility. September's addition of 9,000 manufacturing jobs was 40% lower than the revised figure for August, which showed 15,000 jobs added. Recent months have seen significant data revisions. Adjusted numbers showed 20,000 jobs were added in July, far above the initial report of 5,000. For August, the initial report of 16,000 jobs was revised down to 15,000. Job openings in the sector increased nearly 26% year-over-year to 522,000 in August. Meanwhile, separations rose by nearly 3% to 311,000, driven by increases in both quits, which rose to 197,000, and layoffs and discharges, which increased to 95,000.

Economic context

The modest manufacturing growth occurred against a backdrop of broader economic uncertainty. The U.S. Added only 29,000 jobs in September, missing expectations of 90,000. Also, job figures for July and August were revised down by a combined 60,000 jobs. Over the past 12 months, the economy has added an average of 45,000 jobs per month. Other sectors showed divergent trends. Health care added 17,000 jobs, though this was about half its 12-month average. Construction added 11,000 jobs, with nonresidential specialty trade contractors contributing 12,000 of those. In contrast, financial activities lost 7,000 jobs in September and has shed 129,000 positions since May 2025, with most losses in insurance. Wage growth lagged, with average hourly earnings rising 0.1% month-over-month and 3% year-over-year, below expectations.

Financial markets reacted to the mixed data. The S&P 500 rose 0.41% in premarket trading, while the Nasdaq 100 gained 0.52%. Treasury yields fell, with the 10-year yield dropping 6 basis points to 5.18%. The dollar index slipped, and gold prices rose. The Federal Reserve had raised interest rates in September, hiking the federal funds rate by a quarter percentage point to a range of 3.75% to 4%. Following the jobs report, futures pricing indicated a reduced chance of another imminent rate hike. The ISM Purchasing Managers' Index showed manufacturing employment at 52.7% in September 2026, up 1.5 percentage points from August.