Nonfarm payrolls rose just 29,000 in September versus expectations of 84,000, with July and August revised down by a combined 60,000. The weak report reinforces expectations the Fed will hold in October.

The US economy added only 29,000 nonfarm payroll jobs in September, well below the 84,000 consensus forecast and the prior 12-month average monthly gain of 45,000, according to the Bureau of Labor Statistics. The unemployment rate rose to 4.2%, leaving 7.1 million people counted as unemployed. Prior months were revised lower: July was revised to a loss of 10,000 jobs, and August was cut to 133,000 from 162,000.

Health care led gains with 17,000 positions, construction added 11,000, and manufacturing gained 9,000. Financial activities shed 7,000 jobs. Average hourly earnings rose 0.1% to $37.81, with a 3.0% year-over-year increase. The weak report followed an unexpectedly strong August and marked a sharp reversal. Financial markets reacted immediately: stock futures climbed and Treasury yields retreated as investors interpreted the data as confirmation that the Fed will hold rates steady at its October meeting.