The US added just 29,000 jobs in September, a sharp slowdown in hiring from the prior month. The result has raised doubts about the resilience of the labor market, and trading houses have moved to lower their expectations for Federal Reserve rate hikes. The data released Friday by the Bureau of Labor Statistics marked a steep pullback from the downwardly revised 133,000 jobs added in August, and also came in far below the 88,000 forecast in a Bloomberg survey of economists. Hiring cooled across multiple industries. The healthcare sector, a key engine of job growth in recent months, saw a significant weakening in hiring, while employment in the financial industry continued to contract. Nonfarm payrolls for July and August were revised down by a combined 60,000, with July revised to a loss of 10,000 jobs. The unemployment rate edged up to 4.2% in September from 4.1% in August. Schroders senior economist George Brown said the report was "weaker than market expectations," but cautioned that a single month of soft payrolls is not enough for policymakers to conclude that the labor market is deteriorating on a sustained basis. He added: "This year's nonfarm payroll figures have been like a rollercoaster, with wild swings from month to month." Last month the Fed hiked rates for the first time in three years to fight stubbornly high inflation. The data will fuel a debate over whether the labor market can still withstand further rate increases. Treasury yields fell after the release, and traders scaled back rate hike expectations. The futures market no longer fully prices in a complete rate hike by the end of this year. The two-year Treasury yield, which moves with rate expectations, fell 0.08 percentage point to 4.71%. The market had previously fully priced in a rate hike by December 2026, and that probability has now slipped to 88%. Fed Chairman Kevin Warsh said last month that the employment side of the Fed's dual mandate was currently "in good shape," and that even with inflation "persistently elevated," the Fed still had room to raise rates by 25 basis points. In recent weeks, bets that the Fed would hike again as early as October had risen markedly. But two senior Fed officials, Vice Chair Philip Jefferson and New York Fed President John Williams, signaled this week that policymakers may need more time to assess the data before taking their next step.