October jobs report shows weak hiring

Employers are expected to have added 59,000 jobs in October, according to the Dow Jones consensus. This figure represents a modest increase from the 29,000 jobs created in September. The Bureau of Labor Statistics will release the full nonfarm payrolls report at 8:30 a.m. ET on Friday.

The forecast suggests a continuation of slow growth in the labor market. Despite the low number of new positions, the unemployment rate is projected to remain at 4.2%. This stability occurs because the labor force is shrinking, reducing the number of new jobs needed to keep the jobless rate steady.

Nicole Bachaud, a labor economist at ZipRecruiter, explained that fewer people are available to work. She noted that an aging workforce is pushing individuals into retirement. Decades of low birth rates mean fewer young people are entering the job market. Immigration has also declined, which reduces the number of prime-age workers.

Bachaud said this environment makes it difficult to assess the health of the labor market. She argued that the economy will not return to adding 200,000 jobs a month. Instead, analysts should focus on wage growth as a key signal, particularly for lower-wage workers.

Payroll growth from January 2025 through September 2026 averaged only 35,000 per month. During that period, job gains topped 200,000 in just one month. Seven months saw a loss of jobs. The total number of people in the labor force dropped by 434,000 during this time. The labor force participation rate fell to 61.8%, a decrease of 0.8 percentage points.

While hiring has been weak, other indicators show strength. Initial jobless claims fell to 189,000 last week, the lowest level since July. Job openings increased by 333,000 in September. The number of workers quitting their jobs rose to 3.36 million, the highest level in a year and a half.

Long-term unemployment has risen. The number of workers out of work for more than 25 weeks increased by 495,000 since January 2025. The average duration of unemployment reached 24.8 weeks, up by 2.8 weeks according to BLS data through September. Federal Reserve officials generally view the labor market as solid.

Bachaud described the current situation as one where employed people are stable but those out of work struggle to re-enter. She said, "For people who are out of work because of the slowdown in turnover, people aren't vacating their jobs, employers aren't expanding and adding new jobs. That makes it very difficult to kind of break back in."