Part 2: The U.S. added just 29,000 jobs in September. Nearly 2 million people have now been unemployed for at least six months, while more people are trying to enter or return to a labor market creating fewer places for them to go.

Earlier this week, Social Storytellers Collective reported that the labor market wasn’t collapsing—it was becoming harder to enter. Layoffs remained unusually low, but hiring had slowed enough to create two very different experiences: relative stability for people who already had jobs and a much more difficult market for people trying to find one. Read Part 1: The Labor Market Isn’t Collapsing. It Is Becoming Harder to Enter. The September jobs report now gives us a clearer picture of what happens when that condition persists. Employers added just 29,000 jobs, while unemployment edged up to 4.2%. July and August payroll growth was also revised down by a combined 60,000 jobs, including turning July’s previously reported gain into a loss of 10,000. 

The slowdown still does not look like a traditional wave of layoffs. New unemployment claims recently fell to 197,000, near historic lows, and the number of unemployed people who had lost jobs or completed temporary positions actually declined slightly in September. The pressure is showing up elsewhere. The number of unemployed new entrants jumped from 702,000 in August to 818,000 in September, while another 2.29 million unemployed Americans were trying to re-enter the labor market. The civilian labor force itself expanded by 485,000 people during the month. More people were available for work. Employers simply weren’t creating many additional payroll positions for them to fill. 

Getting In Is One Problem. Getting Back In Is Another.

The duration numbers show what happens when hiring remains restrained. About 1.94 million Americans had been unemployed for 27 weeks or longer in September, up from 1.82 million a year earlier. Long-term unemployment now represents 27.1% of all unemployment, compared with 23.6% in September 2025. The median spell of unemployment has stretched from 10.1 weeks a year ago to 11.5 weeks. Those aren’t recession-level numbers, but they show that once someone falls out of employment, returning is taking longer. 

That creates what amounts to an incumbency advantage. Employers appear reluctant to dismiss workers they have already recruited and trained, but they are also cautious about adding new ones. Someone securely employed can experience this economy as stable. A recent graduate, someone returning after time away or a worker who has been laid off encounters the same economy through applications, interviews and the lengthening time between jobs. The August JOLTS report reinforces that picture: job openings fell to 7.08 million, while layoffs remained low. 

The slowdown is not being distributed evenly. The unemployment rate for Black Americans rose from 6.0% in August to 7.0% in September, while the overall rate was 4.2%. The number of unemployed Black workers increased from about 1.32 million to 1.55 million as Black labor-force participation also increased. One month does not establish a trend, but the size of the movement makes it a number worth watching as hiring slows. 

The Labor Market Has a Throughput Problem

September’s numbers also show how much labor-market pressure sits outside the headline unemployment rate. 7.1 million people were officially unemployed, 5.8 million people outside the labor force said they wanted a job, and 4.5 million were working part time for economic reasons because they could not find full-time work or their hours had been reduced. At the same time, employers added only 29,000 payroll jobs. Average hourly earnings increased just 0.1% for the month and 3.0% over the year. Reuters described the September report as weak but noted that it still showed no evidence of mass layoffs. 

That sharpens the argument from Part 1. The first warning was a narrowing doorway into employment. September shows what happens when the doorway stays narrow: people begin backing up outside it. Some remain unemployed longer. Others stay in jobs they might otherwise leave because the next opportunity looks less certain. New entrants and returning workers compete for a limited flow of openings while companies hold tightly to the employees they already have. A labor market does not have to throw millions of people out of work to become difficult. Sometimes it simply stops letting enough people in.

This is Part 2 of SSC’s examination of the low-hire, low-fire labor market. Read Part 1.