Private reports show uneven job gains, more layoffs in October

The Bureau of Labor Statistics didn’t release the October jobs report on Nov. 7 due to the government shutdown, marking the second consecutive month HR pros have missed out on one key labor market indicator.

Other available reports show hiring demand remained cooler last month, while layoffs picked up. Employers announced more than 153,000 job cuts in October, according to outplacement firm Challenger, Gray & Christmas, the highest level since Oct. 2003. Meanwhile, employers added 42,000 jobs last month, according to ADP, but that growth was concentrated among large businesses.

A few different headwinds could be influencing how HR teams are thinking about hiring strategy right now, experts told HR Brew. Among them is the shutdown itself, which may cause companies to lose money as federal workers pull back on their spending.

An uneven job market. The hiring pickup that ADP tracked last month reversed two consecutive months of decline in August and September. This gain was “extremely uneven,” though, said Justin Ladner, senior labor economist with SHRM.

A few sectors drove job growth, with trade, transportation, and utilities firms adding 47,000 hires to their payrolls, and education and health services adding 25,000. These two industries, Ladner, said, “were really propping up the overall number.” Others, like information and leisure and hospitality, saw employment drop in October.

While businesses have been in “low-hire, low-fire” mode in recent months, the Challenger data points to a potential “no-hire, yes-fire job market,” said Mark Hamrick, Washington bureau chief for Bankrate. While state data hasn’t shown a “significant pickup in unemployment claims” yet, Challenger’s report could be an indicator of where jobless levels are headed, he said.

What’s affecting recruitment and retention? There’s a lot happening in the economy right now that can help explain why HR teams are in a holding pattern for hiring—or even having to lay off workers. Ladner pointed to companies investing in AI adoption, automating certain tasks, and pulling back on hiring for some roles as potential causes. Amazon and IBM are among the firms that are heavily invested in AI, and recently announced layoffs.

Still-high interest rates, inflation, and tariffs are also contributing to an overall environment of economic uncertainty. “You might imagine that there are a lot of firms that are holding off on investments simply because they don’t have a good sense of what the economy is going to look like,” Ladner said.

The ongoing federal government shutdown—now the longest in US history—is yet another factor that could further dampen employers’ hiring plans between now and the end of the year. Around 1.4 million federal workers are either furloughed or working without pay, and economists say this is likely to have ripple effects across the economy.

“As we look at these workers who are either furloughed or working without pay, that’s going to affect the way they spend money,” said Cory Stahle, senior economist with Indeed. “And so that's going to ultimately affect the businesses who are used to receiving the money.”

If there’s one reason to be optimistic about this labor market slowdown, Stahle said, “it represents a real opportunity for some employers,” especially those that are still hiring knowledge workers. At a time when many laid-off federal workers are seeking new opportunities, “there’s some real opportunities for employers to maybe hire some of these people while wages are a little softer and competition a little softer as well.”