October Jobs Report: Hiring Expected to Tick Up From September’s 29,000, but Wages Still Trail Inflation
The Bureau of Labor Statistics releases the October jobs report at 8:30 a.m. ET Friday, and economists expect a modest rebound in hiring after September’s weak 29,000 jobs, NBC News reported. A Dow Jones survey puts the consensus at 59,000 roles added, with the unemployment rate holding at 4.2%. But the same forecasts show annual wage growth of 2.9%, below the 3.7% inflation rate recorded in September, meaning paychecks would continue to lose ground to prices for a seventh straight month.
In NBC News’ exit poll from Tuesday’s elections, 75% of voters called the economy “not so good or poor,” and they ranked it their top issue. On Thursday, the Nasdaq 100 plunged 6%, erasing more than $2 trillion in value in the index’s worst one-day drop since April 2025, NBC News reported.
A “Low Hire, Low Fire” Market With Few Openings for Job-Changers
Payroll growth has been anemic all year: from January 2025 through September 2026, monthly gains averaged just 35,000, with only one month above 200,000 and seven months of losses, CNBC reported. At the same time, layoffs remain scarce — initial jobless claims fell to 189,000 last week, the lowest since July and near the lowest levels since 1969, CNBC noted.
“The problem is the low rate of turnover,” said Diane Swonk, chief economist at KPMG, who also pointed to fewer people entering the labor force. The labor force participation rate has slid to 61.8%, down 0.8 percentage point, CNBC reported. Workers who want to switch jobs face thin options because people aren’t vacating positions and employers aren’t expanding, said Julia Bachaud of ZipRecruiter, in comments cited by CNBC: “If you have a job, you’re fine, right? … There’s not a lot of movement happening.”
Long-term unemployment is climbing anyway: the number of workers jobless for more than 25 weeks is up 495,000 since January 2025, and the average duration of unemployment reached 24.8 weeks, up 2.8 weeks, according to BLS data through September cited by CNBC.
AI’s Data-Center Buildout Is Propping Up Construction and Manufacturing
Much of the hiring that does exist is tied to artificial intelligence infrastructure. Bank of America economist Shruti Mishra said third-quarter GDP data showed “extremely strong business investment,” and she expects Friday’s report to show that spending supporting employment in construction and manufacturing, both through data-center construction and production of AI-related equipment, NBC News reported. The BLS reported manufacturing jobs rose 9,000 in September and are up 72,000 since a recent low in December 2025, while construction added 11,000 jobs, averaging 10,000 a month over the prior year.
BNP Paribas senior economist Andrew Husby, writing in a note cited by Yahoo Finance, expects buildout-related labor demand to outpace displacement over the next few years against anemic labor supply, even as AI may depress hiring in financial services and information sectors. Citi economist Veronica Clark warned that if financial conditions keep tightening, demand for labor could soften more broadly, and that productivity gains from AI adoption could weigh on hiring, NBC News reported.
Seasonal Hiring Offers a Bright Spot for the Holiday Season
One area of strength in Friday’s report could be holiday hiring. The Indeed Hiring Lab reported in October that seasonal hiring is “off to its best start in several years,” a sign momentum could carry past this year’s shopping season, NBC News reported. Some large employers are posting fewer seasonal jobs than a year ago but shifting toward non-seasonal part-time roles. Andy Challenger of Challenger, Gray & Christmas said tariffs are still working through supply chains and retailers are relying on automation and existing staff before hiring net-new seasonal workers.
Forecasts Split Between 55,000 and 65,000 Jobs
Wall Street’s estimates vary. Beyond the Dow Jones consensus of 59,000, Bloomberg-surveyed economists expect 65,000 jobs, Yahoo Finance reported, while Kiplinger cited forecasts of roughly +55,000 headline and +55,000 private payrolls, with the unemployment rate unchanged at 4.2%. A private-sector preview was firmer: the ADP National Employment Report showed private payrolls rose 86,000 in October, above the 75,000 expected, with gains led by trade, transportation and utilities, education and health services, and leisure and hospitality, Kiplinger reported.
Economists say a solid October print would likely signal normalization after a weak summer rather than a broad reacceleration, Vanguard senior economist Adam Schickling wrote in a note cited by Yahoo Finance, but it would reinforce the case for a December rate hike. Traders see a 67% chance of a 25-basis-point increase at the Fed’s Dec. 9 meeting, according to CME FedWatch data cited by Yahoo Finance, which will also weigh November jobs data and October inflation figures.
Questions a Reader Would Ask
Because pay is rising more slowly than prices. Wages are forecast to grow 2.9% annually while September inflation ran at 3.7%, and wages have trailed prices every month since March, NBC News reported.
The Fed meets Dec. 9 and will review November jobs data and October inflation before deciding, Yahoo Finance reported.
Construction and manufacturing tied to the AI buildout, plus trade, transportation and utilities, education and health services, and leisure and hospitality, according to BLS and ADP data cited by NBC News and Kiplinger.
Economists at Citi warn that tighter financial conditions could soften labor demand more broadly, and AI adoption could further restrain hiring, NBC News reported.
What Friday’s report cannot answer is whether the labor market can stay resilient amid high interest rates, slowing labor-force growth and long-term unemployment — the question the Fed will weigh on Dec. 9.
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