The Indirect Employer: What the Church Asks of an Economy That Is Barely Hiring

On Friday, the Labor Department reported that American employers added 29,000 jobs in September, and that July and August had been weaker than first counted. Few workers are being let go, and few are being taken on. Pope Leo XIII opened the Church’s modern teaching on work by telling rulers that their first job was to build laws and institutions that produce prosperity on their own. Ninety years later, the Church gave a name to everything outside the hiring office that decides whether a job gets offered at all, and laid a duty on it.

The News Story

U.S. employers added 29,000 jobs in September, the Bureau of Labor Statistics reported Friday, October 2, well short of forecasts and below the average monthly gain of 45,000 over the prior 12 months. Economists surveyed by CNBC and The Wall Street Journal had expected about 84,000; the LSEG poll cited by Fox Business, and the AP’s own survey, put the consensus near 90,000. The unemployment rate rose to 4.2% from 4.1% in August, leaving 7.1 million people out of work. The rate has stayed between 4.1% and 4.3% since March.¹

The government also revised the 2 prior months downward. July went from a gain of 21,000 to a loss of 10,000, and August fell from 162,000 to 133,000. Combined, payrolls for those months are 60,000 lower than first reported.²

Private employers added 46,000 jobs. Federal, state, and local governments shed 17,000, with most of the state and local losses in education. Health care led all sectors with 17,000 jobs, roughly half its 12-month average of 33,000, as hospitals and outpatient services hired while nursing and residential care facilities cut about 9,000. Construction added 11,000 and manufacturing 9,000. Professional and business services lost 9,000. Financial activities lost 7,000 and are down 129,000 since May 2025, mostly at insurance carriers.³

Pay growth slowed. Average hourly earnings rose 5 cents to $37.81, a 3.0% gain over the year, which the AP reported is the smallest annual increase since May 2021. Production and nonsupervisory workers averaged $32.60 an hour. The average workweek held at 34.4 hours.⁴

The household figures were mixed. Labor force participation was 61.8%, and the AP reported that 485,000 people entered the workforce in September, part of the reason unemployment rose. The jobless rate for Black workers climbed to 7.0%. About 1.9 million people have been unemployed for 27 weeks or more, and 4.5 million work part time because they cannot find full-time hours or had their hours cut.⁵

Outlets read the numbers differently. The AP described a “low-hire, low-fire” market in which few workers are laid off but job seekers struggle to find work, and noted that this was the last jobs report before the November 3 midterm elections. An AP-NORC poll released Thursday found that 17% of U.S. adults approve of President Trump’s handling of the cost of living. The Washington Examiner pointed instead to a 3-month average gain of 51,000, a prime-age employment rate of 80.7%, and no recession signal under the Sahm Rule. Both the AP and the Examiner reported that retirements and the administration’s immigration crackdown have lowered the number of new jobs needed to keep unemployment from rising, by some estimates to near zero.⁶

The report arrives 2 weeks after the Federal Reserve, led by Chair Kevin Warsh, raised its benchmark rate by a quarter point to a range of 3.75% to 4% on September 16, its first increase since 2023, in response to inflation running above its 2% target. After Friday’s release, the CME FedWatch tool showed a 79.5% probability that the Fed holds rates steady at its late-October meeting, up from 35.8% a week earlier. Stocks rose, and the 10-year Treasury yield fell about 6 basis points after nearing its highest level since 2002.⁷

Catholic Social Teaching Analysis

Begin Where Leo Began

Pope Leo XIII wrote Rerum Novarum in 1891, and before he says a word about wages, he describes a broken structure. The old workingmen’s guilds had been abolished; he wrote, “and no other protective organization took their place.” So working men “have been surrendered, isolated and helpless, to the hardheartedness of employers and the greed of unchecked competition,” while “the hiring of labor and the conduct of trade are concentrated in the hands of comparatively few.”⁸ Look at where Leo puts the blame. He names greed plainly, and the first wound he describes is a missing institution, a hole in the way his society had been built.

When Leo turns to the State, his first instruction is about building. “The foremost duty, therefore, of the rulers of the State should be to make sure that the laws and institutions, the general character and administration of the commonwealth, shall be such as of themselves to realize public well-being and private prosperity.” He closes the same paragraph with a sentence every legislator ought to keep on his desk: “the more that is done for the benefit of the working classes by the general laws of the country, the less need will there be to seek for special means to relieve them.”⁹

Of themselves. Leo wants rulers who build well enough that prosperity follows without a constant string of rescues. And he says why it matters: “it is only by the labor of working men that States grow rich,” so justice demands that “they who contribute so largely to the advantage of the community may themselves share in the benefits which they create.”¹⁰

St. Thomas Aquinas, whom Leo quotes several times in the encyclical, had already said where that responsibility sits. Legal justice, the virtue that directs every act toward the common good, “is in the sovereign principally and by way of a mastercraft, while it is secondarily and administratively in his subjects.”¹¹ A mastercraft is the art of the builder who designs the house, as opposed to the mason who lays one course of brick. Workers and employers lay the bricks every day. The design belongs to those who govern.

A Market That Has Stopped Moving

Read Friday’s report as a description of a structure. Employers added 29,000 jobs. Revisions took 60,000 more out of July and August. The unemployment rate is still low at 4.2%, but the AP reports that a Labor Department measure of gross hiring has been “stuck in a rut for more than two years.” Economists call it a “low-hire, low-fire” market: people who have jobs mostly keep them, and people who need one struggle to find it. Glassdoor’s chief economist, Daniel Zhao, said workers in that kind of market “often feel stuck.”¹² Behind the headline stand 1.9 million people who have been looking for half a year or more, and 4.5 million working part time because the full-time hours aren’t there.

Our Lord told a parable about a market like that. A householder goes out at the eleventh hour and finds men still standing in the marketplace. “Why do you stand here idle all day?” he asks. “They said to him, ‘Because no one has hired us’” (Matthew 20:6-7). The parable is about the generosity of God, and I won’t flatten it into an economics lecture. But the men’s answer is honest, and it’s a structural answer. Their idleness had a cause outside themselves. Nobody had come to the market for them.

The Employer Who Never Signs a Contract

Ninety years after Leo, Pope St. John Paul II gave that cause a name. In Laborem Exercens he distinguished the direct employer, the person or firm that signs a worker’s contract, from the indirect employer. “The concept of indirect employer includes both persons and institutions of various kinds, and also collective labour contracts and the principles of conduct which are laid down by these persons and institutions and which determine the whole socioeconomic system or are its result.” Its responsibility is less direct, he wrote, “but it remains a true responsibility,” and the concept applies “in the first place to the State. For it is the State that must conduct a just labour policy.”¹³

And its first duty? “The role of the agents included under the title of indirect employer is to act against unemployment, which in all cases is an evil, and which, when it reaches a certain level, can become a real social disaster.”¹⁴

The Compendium of the Social Doctrine of the Church makes this the standard for every economy. “‘Full employment’ therefore remains a mandatory objective for every economic system oriented towards justice and the common good,” it teaches, and it lays “a particular and grave responsibility” on indirect employers, those “in a position to direct, at the national or international level, policies concerning labour and the economy.”¹⁵ It also gives the measure, and the measure looks forward: a society’s planning capacity is judged “also and above all on the basis of the employment prospects that it is able to offer.”¹⁶

Prospects. That’s exactly what a low-hire market lacks, even with unemployment at 4.2%.

Who Shaped September

So who are the indirect employers in Friday’s report? Each of them helped decide how many chairs were set at the hiring table.

The Federal Reserve is one. On September 16, it raised rates for the first time since 2023, and its statement said that “Job gains have kept pace with the workforce.” Chair Kevin Warsh said the “labor side of the Fed’s congressional remit is in good shape,” and that “our predominant focus is on the price stability side of our mandate,” with inflation above target “for more than five years.”¹⁷ I’d give the Fed its due. Inflation is a tax that falls hardest on the poor, and a central bank that shrugged at it would fail the very workers this post is about. But the Fed carries two mandates by law, and Friday’s report is a reason to weigh the second as seriously as the first when it meets again this month.

Congress and the President are others. Federal, state and local governments shed 17,000 jobs in September, most of the state and local losses in schools. Bradley Saunders of Capital Economics suggested that the slowdown in health care hiring might reflect the administration’s revocation of work authorizations for 350,000 Haitians. The AP also counts trade wars and the conflict with Iran, which has driven energy prices higher, among the shocks the job market has absorbed this year.¹⁸ A person can defend any one of those decisions on its own terms. Laborem Exercens puts a further question to all of them together: what are they doing to the odds that a person who wants work can find it?

The Washington Examiner and the AP both made a fair point on Friday: with baby boomers retiring and fewer immigrants arriving, the economy may need very few new jobs each month to keep unemployment from rising. True, but it cuts both ways. A labor market can hold its unemployment rate steady by shrinking the number of people looking. However, the Church’s measure asks about prospects, which that kind of market does not supply.

Building the Conditions

The Compendium is careful here. The duty of the State, it says, “does not consist so much in directly guaranteeing the right to work of every citizen, making the whole of economic life very rigid and restricting individual free initiative, as much as in the duty to ‘sustain business activities by creating conditions which will ensure job opportunities, by stimulating those activities where they are lacking or by supporting them in moments of crisis’.”¹⁹

That’s Leo’s of themselves again, a century on. Good structure lets the direct employer say yes. A rate path, a tax code, a trade regime, an immigration rule and a school budget each tilt the decision at that table a little, and a just government asks how all of them tilt it together.

What I’d Watch

Watch the Fed’s meeting on October 27 and 28, and listen for whether the word “employment” gets as much airtime as “inflation.” Watch the October jobs report on November 6, three days after the midterms. Lastly, when candidates talk about jobs this month, ask them about the structures behind the number.

If you hire, remember the householder in the parable. He went back to the market five times in one day. In a low-hire season, an employer who takes a chance on someone who has been out of work for six months, or turns a part-time post into a full-time one, does something the indirect employer can only make easier.

Finally, as always, we must pray. Pray for the long-term unemployed, and for everyone who would take more hours if anyone offered them. Pray for the managers making hiring decisions this week. And pray for the men and women at the Fed and in Congress whose decisions set how many of those tables there are.

---

This story turns on the responsibility of the indirect employer: the laws, institutions and policies that shape every hiring decision must be ordered to work for all who are able to do it.

One principle from the Church’s social teaching, applied to the week’s news, in your inbox each Saturday.

Get it by email

---

Notes

1. ↑ “The Employment Situation: September 2026,” U.S. Bureau of Labor Statistics, October 2, 2026, bls.gov; Cris Tolomia, “U.S. September 2026 jobs report: payrolls miss forecasts badly,” Quartz via Yahoo Finance, October 2, 2026, finance.yahoo.com; Eric Revell, “US economy added 29,000 jobs in September, a slower pace than expected,” Fox Business, October 2, 2026, foxbusiness.com; Paul Wiseman, “US hiring slows and unemployment ticks higher with a month remaining before Americans head to polls,” Associated Press via AOL, October 2, 2026, aol.com.
2. ↑ “Employment Situation: September 2026”; Revell, “US economy added 29,000 jobs.”
3. ↑ “Employment Situation: September 2026”; Revell, “US economy added 29,000 jobs”; Wiseman, “US hiring slows.”
4. ↑ “Employment Situation: September 2026”; Wiseman, “US hiring slows.”
5. ↑ “Employment Situation: September 2026”; Wiseman, “US hiring slows.”
6. ↑ Wiseman, “US hiring slows”; Joseph Lawler, “The details of September’s jobs report are more encouraging,” Washington Examiner, October 2, 2026, washingtonexaminer.com.
7. ↑ Eric Revell, “Federal Reserve hikes interest rates for first time since 2023 amid stubborn inflation,” Fox Business, September 16, 2026, foxbusiness.com; Revell, “US economy added 29,000 jobs”; Jake Angelo, “US adds 29,000 jobs in September, far short of expectations,” Semafor, October 2, 2026, semafor.com.
8. ↑ Pope Leo XIII, Encyclical Letter Rerum Novarum: On Capital and Labor (Vatican City: Libreria Editrice Vaticana, May 15, 1891), no. 3, vatican.va.
9. ↑ Pope Leo XIII, Rerum Novarum, no. 32.
10. ↑ Pope Leo XIII, Rerum Novarum, no. 34.
11. ↑ Thomas Aquinas, Summa Theologiae II-II, q. 58, a. 6, trans. Fathers of the English Dominican Province, in New Advent, newadvent.org.
12. ↑ Wiseman, “US hiring slows.”
13. ↑ Pope John Paul II, Encyclical Letter Laborem Exercens: On Human Work (Vatican City: Libreria Editrice Vaticana, September 14, 1981), no. 17, vatican.va.
14. ↑ Pope John Paul II, Laborem Exercens, no. 18.
15. ↑ Pontifical Council for Justice and Peace, Compendium of the Social Doctrine of the Church (Vatican City: Libreria Editrice Vaticana, 2004), no. 288, vatican.va.
16. ↑ Pontifical Council for Justice and Peace, Compendium, no. 289.
17. ↑ Revell, “Federal Reserve hikes interest rates.”
18. ↑ Wiseman, “US hiring slows.”
19. ↑ Pontifical Council for Justice and Peace, Compendium, no. 291.

Books Cited

As an Amazon Associate I earn from qualifying purchases.

• Thomas Aquinas, Summa Theologiae, Latin-English edition, Complete Set (Aquinas Institute / Emmaus Academic, 2012)