According to Zillow Research and the Bureau of Labor Statistics, the September employment report shows that job growth continues to cool. Nonfarm payroll employment grew by just 29,000 positions, falling short of what financial markets expected. While private employers did add 46,000 jobs, government employment actually declined, which brought down the overall number. This represents a meaningful slowdown compared to hiring patterns from a few years back.
Looking at where the jobs were created and lost tells an interesting story about different sectors. Construction held its own with steady gains, helped along by continued investment in data centers. Healthcare and social assistance services added a substantial number of positions, while manufacturing also saw modest growth. But other important sectors like information technology, professional services, and financial activities all posted job losses in September. Even temporary help services, which typically signals broader hiring trends, saw a notable decline.
The bigger picture shows that hiring has slowed significantly over time. The three-month average for job gains this September was substantially lower than it was three years ago when the Federal Reserve began cutting interest rates. What makes this less concerning is that the overall labor force itself is growing more slowly than it used to, so some slowdown in hiring makes sense in that context.
On the wage front, workers are seeing their pay increases moderate. Year-over-year wage growth has come down from earlier levels, and both the rate at which people are getting hired and the rate at which they're leaving jobs remain quite restrained. This points to less movement and flexibility in the job market overall.
For the housing market specifically, this employment picture creates mixed pressures on buyers and sellers. Workers who have jobs feel secure staying where they are, which could mean less motivation to relocate and buy. However, the combination of fewer job opportunities, slower wage growth, and higher mortgage rates is making people think twice about taking on the commitment of a move. Zillow's economists expect this will keep the housing market soft through the end of the year, though there is a bright spot for serious buyers in the form of more homes hitting the market and some sellers becoming more flexible on pricing.
What I am seeing locally here in the Bay Area and out in Fremont and the East Bay is that this kind of labor market creates real tension for my clients. People want to move for better opportunities or lifestyle reasons, but they're hesitant about job security and what their next paycheck really means in this climate. That caution is actually opening doors for well-positioned buyers who can move decisively, even as others sit on the sidelines. For sellers, it means you need to be realistic about pricing and condition to attract the smaller pool of active buyers out there.
