U.S. September payrolls added 29,000 jobs, missing forecasts, while economist Mohamed El‑Erian says AI will boost productivity more than replace workers.

U.S. nonfarm payrolls rose by 29,000 jobs in September, well below the 90,000 economists expected, as economist Mohamed El‑Erian warned AI could boost productivity more than it displaces workers.

September payroll report

The U.S. Bureau of Labor Statistics reported the modest increase on Friday, noting that the unemployment rate edged up to 4.2%, a fraction higher than the 4.1% forecast. Average hourly earnings grew 0.1% over the month, falling short of the 0.3% estimate.

Revised August figures

The agency also revised August’s job gain to 133,000, down from the previously reported 162,000. The downward adjustment underscores a slowdown in hiring momentum after a year of robust growth.

Economists' outlook

Analysts had projected a near‑90,000 increase for September, a target based on trends in consumer spending, manufacturing output and the Federal Reserve’s monetary stance. The gap between forecast and actual hires fuels concerns about a softening labor market.

El‑Erian on AI and work

In an interview with the 8:30 hosts, El‑Erian said AI technologies are set to become "labor enhancers" rather than mass job destroyers. "AI will be a tool that makes workers more productive, not a force that eliminates entire occupations," he said.

He added that the technology’s capacity to automate routine tasks could free employees for higher‑value activities, potentially offsetting the modest job losses that some forecasts predict.

Policy implications

El‑Erian cautioned policymakers to focus on upskilling programs that align with AI‑driven demand. He suggested that education systems and corporate training should prioritize digital literacy, data analysis and creative problem‑solving.

He also warned that premature regulation of AI could stifle the very productivity gains that might help close the current hiring gap.

What to watch

Market observers will monitor the next BLS release for signs of acceleration or further deceleration. Analysts will also track corporate investment in AI tools, a factor El‑Erian believes could reshape the labor landscape over the coming years.