The US economy added 29,000 jobs in September while the unemployment rate rose to 4.2%, new data showed, painting a mixed picture of the labour market.

The job gains fell short of expectations but kept the economy's slow hiring streak alive. Revisions were also negative: July and August figures were cut by a combined 60,000 jobs.

The unemployment rate ticked up to 4.2%, suggesting more people are entering the workforce than finding jobs.

The data arrives at a sensitive moment for the Federal Reserve, which is weighing whether to cut interest rates further. Weak hiring argues for cuts, but policymakers also worry about inflation.

Economists say the labour market is cooling but not collapsing. Businesses are hiring cautiously amid uncertainty over trade policy and tariffs.

Wage growth has also moderated, which should ease inflation pressures. But it means workers have less bargaining power than two years ago.

The October jobs report will be the next key data point. For now, the economy appears to be in a holding pattern — neither booming nor breaking.