The U.S. labor market posted an unexpectedly strong rebound in September, reviving growth optimism and casting fresh uncertainty over whether the Federal Reserve will deliver another rate cut in December.

Non-farm payrolls jumped by 119,000 in September, according to the official labor report released Thursday after a six-week delay due to the government shutdown.

Despite the hiring pickup, the unemployment rate edged up from 4.3% to 4.4%—marking the highest level since October 2021.

Average hourly earnings rose 0.2% from the previous month, falling short of the 0.3% forecast. On a yearly basis, however, wages edged up to 3.8%, up from 3.7% in August.

Health care led the job growth, adding 43,000 positions—primarily in ambulatory services, up 23,000, and hospitals, up 16,000. Food services and drinking places added another 37,000, while social assistance gained 14,000 jobs, driven by individual and family services, up 20,000.

By contrast, transportation and warehousing shed 25,000 jobs, with warehousing and storage down ...