MW Is the U.S. jobs market tanking? Here's what the latest clues say.

By Jeffry Bartash

More layoffs are planned, but jobless claims remain low

A corrections-officer recruiter speaks with attendees during a job fair in New York City. Finding a job has gotten harder these days.

The U.S. jobs market might not appear to be crumbling, but it's not getting any better - and it probably won't anytime soon.

Worries about the labor market flared up again this week after a new report suggested a big surge in layoffs in October. The anxiety may have also contributed to a sharp decline in stock prices DJIA SPX COMP.

Getting a clear read into the health of the labor market is a tough task as of late. Normally, investors would turn to the monthly U.S. employment report to get answers, but it's been delayed by the longest government shutdown in history. The October employment report, which was due Friday, was the latest casualty.

In the absence of these critical economic reports, Wall Street has turned to other sources for clues. One report that tripped up Wall Street this week a tally of announced U.S. layoffs by large companies.

The private research firm Challenger, Gray & Christmas found that announced layoffs tripled in October and hit the highest level since the pandemic five years ago. Announced layoffs jumped to 153,074 in October, to put the year-to-date total at 1.1 million.

The Challenger report wasn't all bad; it also found that hiring plans rose in October by the most in 13 months. Still, the report also made clear that companies are likely to hire far fewer workers during the holiday season.

Economist say investors should be cautious about the Challenger report, though. For one thing, only the very largest companies tend to publicly announce layoffs. Most midsize and smaller businesses don't.

"Companies don't announce every time they make a job cut, so the data are ... not representative of the total economy," said Bill Adams, chief economist at Comerica.

Nearly 20 million people lose their jobs in any given year, statistics show. In 2024, for instance, an estimated 20 million people lost their jobs, according to the more comprehensive data published by the U.S. Bureau of Labor Statistics.

Nor does Challenger's report provide a net jobs estimate - how many jobs are created each month versus how many are eliminated. What matters most, after all, is whether the economy is creating more jobs than it's losing.

For that, investors had to turn to ADP's $(ADP)$ monthly employment report of private-sector companies. ADP said businesses added a net 42,000 jobs in October, marking the biggest increase in three months.

A big reason why the economy might still be adding jobs - if just barely - is because layoffs remain very low, even in a period of sluggish economic growth.

The weekly jobless-claims report produced by the BLS has been postponed, but U.S. states themselves all publicly report how many people apply for benefits each week.

In the seven days ended Nov. 1, Citi and other Wall Street firms estimate, new jobless claims rose to 229,000, from 220,000 in the prior week. That's only about about 10,000 higher compared to before the shutdown began.

"Initial claims remain at low levels, which is still consistent with low layoffs so far," Citi Research said, but "recent job-cut announcements pose upside risk to initial claims in coming months."

Wall Street economists put more faith in the jobless-claims data given how comprehensive it is: It covers 53 states and territories, and comes out each week.

The trend in jobless claims stands "in stark contrast" to the Challenger job report and shows "the labor market isn't falling off a cliff," said Oren Klachkin, financial-market economist at Nationwide.

The Bank of America Institute, meanwhile, said the U.S. labor market appeared to be stable in October based on an examination of tens of millions of customer bank accounts. BofA said it found hardly any change in the number of payroll checks or unemployment checks deposited last month.

"While our data suggests the labor market has cooled over recent months, there was no sign of a further deceleration in October," the Bank of America Institute said.

The Federal Reserve Bank of Chicago also found evidence of stability. The Chicago Fed said its employment dashboard showed the unemployment rate was basically unchanged in October, at a range of 4.3% to 4.4%.

So the labor market is OK, then? Not exactly. Very few companies are hiring now, and few have big plans to do so anytime soon.

The job-search website Indeed (JP:6098) $(RCRUY)$, for example, said job postings had slumped to their lowest level since 2021.

The labor market might even be getting worse even if it's hard to tell, some economists believe.

"The once 'low-hire, low-fire' labor market is showing signs of shifting toward 'low-hire, more-fire,'" said Joe Brusuelas, chief economist at RSM.

It may be a while before we know for sure.

The quality of the November employment report, for instance, could be threatened if the government shutdown persists and BLS employees remain on furlough for much longer. The September and October reports have already been delayed.

If so, Wall Street might not get a clear and more complete look at the health of the labor market until early January, when the December employment report is published.

-Jeffry Bartash

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November 08, 2025 09:00 ET (14:00 GMT)

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