US Jobless Rate Eases to 4.2% as Labor Force Participation Falls to 61.8%
BLS data show the US unemployment rate fell to 4.2% in September 2026 from 4.4% a year earlier, but participation and the employment ratio also declined.
The story in focus
The US unemployment rate stood at 4.2% in September 2026, down from 4.4% a year earlier and from a peak of 4.5% in November 2025, according to the Bureau of Labor Statistics. The improvement came as fewer people took part in the labor market: participation fell to 61.8% from 62.5%, and the share of the population with a job fell to 59.2% from 59.7%. The MastheadWire unemployment tracker shows the rate has now held at or above 4.0% for 27 consecutive published months.
- The seasonally adjusted unemployment rate was 4.2% in September 2026, compared with 4.4% in September 2025.
- The rate peaked at 4.5% in November 2025, its highest level since October 2021, and has stayed between 4.1% and 4.3% since March.
- Labor force participation fell 0.7 percentage point over the year to 61.8%, and the employment-population ratio fell to 59.2%.
- Long-term unemployed workers made up 27.1% of all unemployed people, up from 23.6% a year earlier.
A Lower Rate, a Smaller Labor Force
The headline measure has improved over the past year. BLS reported on October 2 that the unemployment rate was 4.2% in September, little changed from 4.1% in August. The number of unemployed people was 7.1 million. A year earlier, the rate was 4.4%, and it reached 4.5% in November 2025, the highest reading since October 2021.
The participation figures give a less favorable picture. The labor force participation rate fell from 62.5% in September 2025 to 61.8% in September 2026. The employment-population ratio, which measures the share of people aged 16 and over with a job, fell from 59.7% to 59.2%. When participation falls, the unemployment rate can decline even if employment does not rise, because people who stop looking for work are not counted as unemployed.
The Longer Record
The MastheadWire tracker, built from the BLS Current Population Survey series, shows a slow upward drift since the cycle low of 3.4% in April 2023. The rate first rose above 4.0% in June 2024 and has not returned below that level in any published month since, a run of 27 readings. BLS did not publish household survey data for October 2025, so the tracker shows a gap for that month.
By historical standards, the current rate remains low. It is below the average of 5.9% for the 2000 to 2019 period and far below the 14.8% peak of April 2020. It is above the 3.5% rate of February 2020, before the pandemic. The three-month average, 4.1%, is the lowest since early 2025.
Hiring Has Slowed
Payroll data from the separate establishment survey point to slow job creation. Employers added 29,000 jobs in September, after an average monthly gain of 45,000 over the prior 12 months, BLS said. Revisions lowered July and August by a combined 60,000. Health care added 17,000 jobs, and financial activities employment is down 129,000 since May 2025.
Average hourly earnings for private-sector employees rose 3.0% over the year to $37.81. Consumer prices rose 3.7% over the same 12 months, according to the BLS Consumer Price Index, so average pay did not keep pace with prices. The jobless rate for Black workers rose to 7.0% in September, while the rate for adult women was 3.6%.
What Comes Next
The MastheadWire tracker publishes the full monthly series since 2000 with a chart and a CSV download, and the latest figures match the BLS database. The Employment Situation report for October 2026 is scheduled for November 6, 2026, at 8:30 a.m. Eastern time.
Why did the US unemployment rate fall while participation declined?
The unemployment rate counts only people who are actively looking for work. Between September 2025 and September 2026, participation fell from 62.5% to 61.8% and the share of people employed fell from 59.7% to 59.2%, so part of the drop from 4.4% to 4.2% reflects fewer job seekers rather than more jobs.
Sources & further reading
- The Employment Situation, September 2026 (USDL-26-1549) ↗bls.gov
- Labor Force Statistics from the Current Population Survey ↗bls.gov
- MastheadWire US unemployment rate tracker: monthly data since 2000 ↗mastheadwire.com
- Unemployment rate series since 2000, CSV file ↗mastheadwire.com
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