Is the Job Market Still Strong?

Layoffs Rise, But Jobless Claims Stay Low: What’s Really Going On in the U.S. Labor Market

The U.S. job market isn’t collapsing — but it’s certainly losing momentum. And with fresh data pointing to a surge in layoffs, investors are growing uneasy.

Layoffs Surge to Pandemic-Era Levels

A new report from Challenger, Gray & Christmas showed that announced layoffs tripled in October, climbing to 153,074 — the highest since the pandemic began.

That brings the total number of announced job cuts this year to over 1.1 million.

There was one bright spot: hiring plans improved, rising by the most in more than a year. Still, companies are expected to bring on fewer seasonal workers this holiday season — a sign of caution heading into year-end.

Economists warn against reading too much into these figures. The Challenger data mostly reflects large corporations that publicly announce layoffs, not the smaller and midsize firms that make up most of the economy. Historically, around 20 million Americans lose their jobs every year, based on Bureau of Labor Statistics (BLS) data.

Hiring Slows, But Jobs Are Still Being Added

Private payroll data from ADP showed that U.S. businesses added 42,000 jobs in October — the biggest gain in three months. It’s a modest increase, but it suggests that the labor market is still managing to create more jobs than it’s losing, at least for now.

Unemployment Claims Stay Steady

Even as layoffs rise, jobless claims remain near historic lows. In the week ending Nov. 1, new claims for unemployment benefits rose slightly to 229,000, up from 220,000 the prior week.

According to Citi Research, these numbers are still consistent with a stable job market — though the recent uptick in announced layoffs could push claims higher in the coming months.

Economists generally place more confidence in jobless-claims data because it’s broader and timelier, covering all 53 states and territories.

Signs Point to Stability — For Now

Other indicators support the view that the labor market remains steady:

• Bank of America Institute found almost no change in payroll or unemployment deposits in October.
• The Chicago Fed reported that the unemployment rate stayed roughly unchanged, between 4.3% and 4.4%.

But the pace of hiring is clearly slowing. Job postings on Indeed have dropped to their lowest level since 2021, signaling that fewer companies are expanding.

Economist Joe Brusuelas of RSM summed it up:

“The once ‘low-hire, low-fire’ labor market is shifting toward ‘low-hire, more-fire.’”

The Big Unknown

The government shutdown has delayed the release of key BLS employment reports, making it harder to assess the true state of the labor market. With the September and October reports still on hold, analysts may have to wait until early January — when December data is expected — for a clearer view.

Until then, investors are left navigating a job market that looks steady on the surface, but increasingly fragile underneath.