The Synchrony booth at the NC4ME recruitment event for military veterans in Wilmington, North Carolina, USA, Wednesday, October 28, 2026.
Allison Joyce Bloomberg Getty Images
The US economy is not expected to add much to the workforce in October, with employers reluctant to hire but also not to cut staff amid a shrinking labor force and long-term unemployment concerns.
Economists were looking for a modest 59,000 nonfarm payrolls, up slightly from 29,000 manufacturing jobs in September, according to the Dow Jones consensus. These results will continue the pattern of sparse growth.
But it’s OK: The unemployment rate is also forecast to remain at a very low 4.2%, a product of a climate where a stagnant workforce reduces the need to increase the workforce to keep the unemployment rate steady.
“And long term, we don’t need as many jobs added to the economy to have a stable workforce because fewer people are available to work,” said Nicole Bachaud, a labor economist at jobs site ZipRecruiter. “An aging workforce is pushing many people to retire. We’ve had decades of low birth rates, which means we don’t have many people coming in to replace those retiring workers.
Assessing the health of the labor market in that climate is a moving target, Bachaud said.
More clues will come Friday when the Bureau of Labor Statistics releases its October nonfarm payrolls report at 8:30 a.m. ET.
“Do we have an economy that has a lot of productivity but not a lot of jobs? Are we starting to focus on things like wage growth? What’s more of a signal, especially for low-wage workers?” she said. “I think the situation we’re in right now is because we’re not going to go back to 200,000-plus jobs being added every month.
Signs of strength and weakness
Indeed, salary growth from January 2025 to September 2026 averaged only 35,000. There was only one month during that period when it earned the highest of 200,000 and seven months it had a loss.
But the unemployment rate has barely risen, rising only 0.2 percentage points despite a marked slowdown.
However, during that period, the labor force has contracted by 434,000 and is down by just one million since September 2025. The share of the labor force that is working or looking for work, known as the labor force participation rate, also fell sharply, falling to 61.8%, or a slide of 0.8 percent.
But while rent has weakened, other aspects show strength.
The level of layoffs has been low, with initial jobless claims falling to 189,000 last week, the lowest since July and hovering around the lowest level since 1969. Job vacancies also rose by 333,000 in September, while the rate of workers leaving their jobs – a proxy for confidence that they can find new jobs at 6 million, and a half.
On the contrary, long-term unemployment has become a problem. The number of workers without work for more than 25 weeks increased by 495,000 from January 2025, while the average duration of unemployment was at 24.8 weeks, an increase of 2.8 weeks, according to BLS data through September.
Federal Reserve officials generally view the labor market as solid, but questions remain.
“If you have something to do, you’re fine, right?” ZipRecruiter’s Bachaud said. “There is not much movement happening, but at least you are working. For people who are not working because of the slowdown in turnover, people are not vacating their jobs, employers are not expanding and adding new projects. That makes it very difficult to rest again.