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Absent government reports during what's become the longest shutdown in history, private economic data has become essential for understanding the state of the labor market, and a new report from one of the largest outplacement firms is a flashing red warning sign. In October, U.S. employers cut more than 153,000 jobs, Challenger, Gray & Christmas said in a report out Thursday– that's the highest figure for the month since October 2003 and the highest for a single month in the fourth quarter since 2008. It also reflected a colossal 183% increase from just one month prior, when employers trimmed 54,000 jobs. “October’s pace of job cutting was much higher than average for the month. Some industries are correcting after the hiring boom of the pandemic, but this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes. Those laid off now are finding it harder to quickly secure new roles, which could further loosen the labor market,” said Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas. The firm reported year-to-date cuts have reached 2,304,755, the highest level since 2020. In nearly 294,000 planned layoffs this year, the impacts of President Donald Trump's Department of Government Efficiency, or DOGE, were cited by employers. This included direct cuts to the government workforce and contractors. Challenger said that in an additional 21,000 job cuts, the "DOGE downstream impact," i.e., reduced federal funding to private entities and non-profits, was cited. In October specifically, general cost-cutting and artificial intelligence were also major forces behind job cuts. Looking at how specific industries fared last month, technology continued to see the most private-sector job losses, followed by retailers, driven by rising costs, changing consumer behavior and store closures. This year, retail seasonal hiring is expected to be the weakest in 15 years, according to the National Retail Federation's holiday forecast announced Thursday. Retailers are expected to add between 265,000 and 365,000 seasonal workers, "which we do think reflects a softening and slowing labor market," NRF said. Both retailers and consumers will carry a large burden of tariffs this holiday season. According to a recent analysis by LendingTree, shoppers will shoulder $28.6 billion–an average of $132 per person–and retailers are expected to absorb $12 billion. Though consumer sentiment sits at historically low levels, Americans keep spending. The NRF forecasts holiday sales will increase between 3.7% and 4.2% from last year, pushing seasonal spending to $1 trillion for the first time. In 2024, spending rose 4.3% from 2023, resulting in $976 billion in holiday sales.
