The US workforce saw a brief bump in hiring this October, coupled with a steep rise in firings. The Bureau of Labor Statistics will likely not publish job data again this year due to the government shutdown. The Federal Reserve’s preferred gauge of the US workforce is unavailable, but what we do have is independent data from the ADP and Challenger, Gray & Christmas.
On one side, the private sector scored its first notable month of hirings since July 2025. The ADP estimates that employers brought on 42,000 new employees last month, exceeding expectations. Mega corporations led in new hires for the month. Trade, transportation, and utilities added 47,000 new jobs, followed by education and health care at 25,000. Professional business services experienced a 15,000 loss, information positions were cut by 17,000, and leisure and hospitality shed 5,000 jobs.
Pay increased at a 4.5% annual rate. Some see the ADP data as promising, considering the 29,000 positions lost in September.
However, Challenger, Gray & Christmas found that firings in October peaked at a 22-year high. Job cuts for the month surged 183% from September to 153,074, also marking a 175% annual rise. This is the highest reading for layoffs in October since 2003. The agency found that 2025 has seen the steepest layoffs since the Great Recession era of 2009.
“Like in 2003, a disruptive technology is changing the landscape,” said Andy Challenger, workplace expert and chief revenue officer at the firm. “At a time when job creation is at its lowest point in years, the optics of announcing layoffs in the fourth quarter are particularly unfavorable.”
Nonprofit agencies shed 27,651, a 419% annual rise. The agency reported that 27,651 jobs in the tech sector, an area that is rapidly shrinking, with total layoffs coming in six times higher than in September.
AI replacement is fueling the workforce contraction that was ignited by a loss of confidence. Lower rates did not entice companies to expand their workforce last month, as they see no growth in the future. Companies will continue to replace jobs with AI or outsource to India where possible. Cities requiring a high minimum wage will begin moving to AI immediately.
There have been over 1.1 million layoffs in 2025, a 65% increase from the same time period in 2024. The economy has not seen such a “softening” since the world shutdown in 2020. Our computer models indicate that this is, unfortunately, the beginning of a trend, and we will see companies continue to downsize in 2026.
