Key Takeaways
- U.S. employers added just 29,000 jobs in September 2026, and unemployment held at 4.2%.
- Health care added 17,000 of those jobs, about 59%, and has accounted for roughly three of every four jobs added over the past year.
- The Federal Reserve raised rates by a quarter point to 3.75%–4% on September 16, its first hike since 2023.
- Inflation was 3.4% in August, driven heavily by energy, while wages grew just 3.0%.
- Small businesses that line up working capital now, for inventory, productivity, hiring or new health care work, are best positioned for the months ahead.
If you only read the headlines from Friday’s jobs report, you’d think the economy hit a wall. Employers added just 29,000 jobs in September, according to the Bureau of Labor Statistics, well below forecasts. The BLS also revised July and August down by a combined 60,000 jobs. July now shows a loss of 10,000.
As usual, the headline doesn’t tell the whole story. The picture for small business owners is mixed. There are real pressures, but there are also some clear opportunities for owners who position themselves now.
How We Got Here
Let’s take a step back. Over the prior 12 months, the economy averaged 45,000 new jobs a month. That isn’t a boom, but it isn’t a bust either. Unemployment sits at 4.2%, little changed from August. The economy is still growing. It’s just growing slowly, and the growth is concentrated in only a few industries.
The bigger story for Main Street is inflation. Consumer prices rose 3.4% over the past year through August. Energy is doing much of the damage. Gasoline alone is up 27.4% from a year ago. Strip out food and energy and “core” inflation is a much tamer 2.4%.
That’s still enough to bite into paychecks. Average hourly earnings rose only 3.0% over the past year, to $37.81.
Translation: the typical worker’s paycheck isn’t keeping up with prices at the pump. When consumers feel squeezed, they get choosier about how they spend. You’ve probably already noticed it at your register.
The Federal Reserve noticed too. On September 16, the Fed raised its benchmark rate by a quarter point to a range of 3.75% to 4%. It was the first rate hike since 2023, and the vote was unanimous. In its statement, the Fed said economic activity “is expanding at a solid pace,” but inflation “remains elevated.”
Since the hike, Fed officials have sounded patient. New York Fed President John Williams said there is “no need for urgency on another hike.”
So where does that leave business owners? Borrowing costs have gone up, and the Fed has left the door open to another move if inflation doesn’t cool. Waiting for rates to fall before investing in your business is not a strategy for the next six months.
The Bright Spot: Health Care
Here’s the part of the report we found most encouraging. Health care added 17,000 jobs in September. That’s nearly 6 of every 10 jobs created across the entire economy. The gains came from doctors’ offices, outpatient clinics and other ambulatory care (+13,000) and from hospitals (+12,000), partly offset by a 9,000-job drop at nursing and residential care facilities. Nursing homes, which rely heavily on immigrant caregivers, have been struggling to staff up.
September was actually a slower month for health care. Over the prior year, the sector averaged 33,000 new jobs a month, close to 400,000 in total. That’s about three of every four jobs the whole economy added over that stretch. Health care has been the most dependable hiring engine in the country, and that isn’t changing anytime soon. An aging population doesn’t stop needing care when gas prices go up!
For small businesses, this matters in two ways.
If you’re in health care: independent practices, home health agencies, physical therapy clinics, dental and specialty offices are seeing steady demand. The constraint isn’t patients, it’s capacity. That means hiring and onboarding staff before the revenue from them arrives, adding treatment rooms, or buying the diagnostic equipment that lets you see more patients each day. Insurance reimbursements can take 30 to 90 days to come in, so growing practices regularly run short of cash just when demand is strongest.
If you serve health care: the opportunity goes well past clinics. Contractors build out and renovate medical offices. Commercial cleaners, medical transport companies, staffing firms, IT providers and suppliers all serve a growing customer base that pays reliably. If health care isn’t on your customer list yet, now is a good time to add it. Doing that usually means adding equipment, vehicles or people ahead of the contracts.
What Main Street Is Telling Us
The National Federation of Independent Business found the same split in its August survey. The Small Business Optimism Index slipped to 98.7, still slightly above its 52-year average of 98. The NFIB’s Uncertainty Index, however, sits at 89, far above its historical average of 68.
Owners named inflation and taxes as their single most important problem, tied at 16% each. And 35% of owners still reported job openings they couldn’t fill.
In other words, owners feel good about their own businesses and uneasy about everything around them. We think that’s the right instinct!
On the Horizon
You may be asking yourself, “Should I hold off on investing until things are clearer?” We’d argue the opposite. Here’s what we see coming in the months ahead.
Costs aren’t going to wait for you. With energy driving inflation and the Fed open to raising rates again, the cost of fuel, materials and borrowing is more likely to go up than down. Businesses that buy inventory and supplies ahead of the holiday season, or lock in pricing with vendors now, protect their margins.
Productivity is the hedge. We said it back in 2019 and it’s even more true today: the best defense against rising costs is getting more output from the people you already have. That might mean equipment that cuts labor hours, software that automates your back office, or a second truck that lets one crew finish two jobs a day. These investments pay for themselves, but they cost money up front.
Hiring may be getting easier. With 7.1 million people unemployed and job growth slowing, the labor market isn’t as tight as it has been. Businesses that have struggled to fill positions, including the 35% the NFIB counted, may find better candidates now than at any point in the last few years. You need enough working capital to cover payroll until those new employees are bringing in revenue.
Cash is a cushion. Slower growth means slower-paying customers. Businesses with a few months of working capital on hand can absorb a late receivable or a soft month. Businesses without it may have to turn down work they could have taken.
The Bottom Line
The economy isn’t collapsing, and it isn’t booming either. It’s an economy that rewards preparation. The small businesses that come out of this stretch ahead will be the ones that already had their financing lined up when the opportunity showed up: a new health care contract, a bulk inventory deal, a great hire or a piece of equipment that doubles output. The businesses waiting until they need the money will be scrambling for it.
As always, we’ll keep a close eye on the data and share what it means for small businesses as the picture develops.
Frequently Asked Questions
Is now a good time for a small business to get financing?
With the Fed raising rates in September and leaving the door open to another move, borrowing costs are more likely to rise than fall in the near term. Businesses with a clear use for capital, such as inventory ahead of price increases, equipment that saves labor, or staff to meet demand, may be better off securing it before costs go up.
How does the Fed's September 2026 rate hike affect small business loans?
The Fed raised its benchmark rate by a quarter point to 3.75%–4%. Many variable-rate loans and lines of credit are tied to the prime rate, which moves with the Fed, so payments on those can rise. New financing will generally cost more than it did earlier in the year.
Why is health care hiring still growing when the job market is slowing?
Demand for care is driven by an aging population more than by the business cycle. Health care added about 33,000 jobs a month over the past year, roughly three-quarters of all U.S. job growth, and 17,000 of September’s 29,000 new jobs.
What can small business owners do about inflation?
Inflation was 3.4% in August, led by energy, while wages grew 3.0%. Locking in supplier pricing, buying key inventory early and investing in tools that raise productivity are the main ways owners can protect their margins.
About the Author
Gregg Mora is the Chief Financial Officer of Dynamic Capital, a small business funding company. He writes about the economy and what it means for business owners. Connect with Gregg on LinkedIn: linkedin.com/in/greggmora
Sources
- U.S. Bureau of Labor Statistics: Employment Situation, September 2026
- U.S. Bureau of Labor Statistics: Consumer Price Index, August 2026
- Federal Reserve: FOMC statement, September 16, 2026
- NFIB: Small Business Optimism Index, August 2026
