The Synchrony booth at NC4ME, a veteran recruitment event held in Wilmington, North Carolina, USA on Wednesday, October 28, 2026.
Alison Joyce | Bloomberg | Getty Images
Although employers are reluctant to hire workers, they are not cutting staff due to the shrinking labor force and growing long-term unemployment problem, and the U.S. economy is not expected to see significant employment growth in October.
Economists expect a slight increase in nonfarm payrolls to 59,000, up from 29,000 jobs created in September, according to the Dow Jones Consensus. As a result, a sparse growth pattern will continue.
But that’s OK in a way. Projections also suggest that the unemployment rate will remain at a very low level of 4.2%, a product of a climate in which a stagnant workforce reduces the need for large-scale hiring to stabilize unemployment.
“In the long run, we don’t need to add as many jobs to the economy to have job security because there are fewer people working,” said Nicole Bashaw, a labor economist at job site ZipRecruiter. “The aging of the workforce is forcing more people into retirement. We’ve had low birth rates for decades, which means there aren’t as many people coming in to replace the workers who are retiring. And immigration is now much lower, which has eliminated some of the jobs among prime-age workers.”
Bashaw said assessing the health of the labor market becomes a moving target under these circumstances.
More clues will come when the Bureau of Labor Statistics releases its October nonfarm payrolls report at 8:30 a.m. ET on Friday.
“Are we becoming an economy that is more productive but doesn’t have as many jobs? Are we starting to focus on things like wage increases? Is that a signal more, especially for low-wage workers?” she said. “I think that’s the situation we’re in right now, because we’re not going to go back to a situation where we’re adding 200,000-plus jobs every month. That’s not the scenario we’re sitting in.”
signs of strength and weakness
In fact, the average employment growth from January 2025 to September 2026 was only 35,000. During this period, there was only one month in which the profit exceeded 200,000, and there were seven months in which there was a loss.
However, despite the noticeable slowdown, the unemployment rate has barely changed, increasing by just 0.2 percentage points.
However, the labor force population decreased by 434,000 people during this period, and by just under 1 million people from September 2025 onwards. The share of the labor force working or looking for work, known as the labor force participation rate, also fell sharply, dropping 61.8%, or 0.8 percentage points.
But despite the slump in employment, other dimensions are showing strength.
Levels of layoffs are weak, with new jobless claims coming in at 189,000 last week, the lowest level since July and hovering near the lowest level since 1969. The number of job openings also rose by 333,000 in September, and the number of people leaving their jobs, a measure of confidence in being able to find a new job, reached 3.36 million, the highest level in 18 months.
Conversely, long-term unemployment has become a problem. The total number of workers unemployed for 25 weeks or more has increased by 495,000 since January 2025, and the average length of unemployment has increased by 2.8 weeks to 24.8 weeks, according to BLS data through September.
Fed officials generally see the labor market as strong, but questions remain.
“As long as you have a job, you’ll be fine, right?” said ZipRecruiter’s Bachaud. “There’s not a lot of movement going on, but at least you’re employed. For those who are losing their jobs because of lower turnover, people aren’t quitting their jobs and employers aren’t expanding jobs or adding new jobs, so it’s making some types of re-employment very difficult.”
