Entrepreneurs wanting a clearer view of where the economy is heading may want to consult a crystal ball once they’ve checked the usual, but often conflicting indicators. Because even as a new study suggests their fellow small business owners continue hiring at a modest yet sustained pace, other data reflects larger companies may have now started cutting headcount amid stagnating labor market conditions.
If the clashing information isn’t confusing enough, the government shutdown won’t make it any easier for business owners to figure out how the economy is faring. The Bureau of Labor Statistics (BLS) has said it will not produce its usual monthly jobs report scheduled for October 3, as federal agencies significantly scale back activities until Congress can come to an agreement on their funding. That means observers will instead have to rely on other data for clues on whether the anemic hiring rates by companies since May continued into September. The other statistics available don’t suggest an uptick in that activity occurred, however.
Making sense of the economy’s state is even more difficult in light of upwardly revised data in late September that showed GDP grew by an impressive 3.8 percent in second quarter of 2025. That makes continued weak company hiring more difficult to understand, especially as businesses head toward the typically robust year-end season.
On the comparatively positive side, payroll and human resources service provider Paychex released its monthly analysis of Main Street companies Monday, finding small businesses hired slightly fewer people in August compared to July. Despite that, the 99.52 point reading of its index remained relatively strong, and was paired with data showing entrepreneurs limited their annualized rate of wage increases in August to 2.68 percent. That marked their eleventh straight month of holding salary growth to under 3 percent.
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“Stable job growth, wage inflation continues below 3 percent, and there’s really no signs of recession,” Paychex CEO John Gibson told CNBC this week. “We continue to see strong demand for our solutions — which are all indicating to me that small businesses are resilient in this economy.”
But other indicators suggest larger companies may no longer be as hearty in “this economy.”
On Tuesday, the BLS released its monthly Job Openings and Labor Turnover Survey (JOLTS) for August, showing similar low rates of hiring, layoffs, and employee quitting that have persisted in recent months. That’s largely been attributed to company leaders holding current headcounts steady until they get a better idea of how hard import tariffs will dent their bottom lines — and whether continued warnings from economists of a looming recession play out.
That wariness limited job creation to just 22,000 positions in August, and an average of just 26,750 new posts since May. But even as those cautious, wait-and-see strategies avert the mass layoffs that businesses often carry out in expectation of the economy slowing, analysis by job posting platform Indeed warns that passiveness takes a toll over time.
“August’s layoff rate of 1.1 percent, a hires rate of 3.2 percent, and 7.2 million job openings continued the low-firing, low-hiring trend that defines today’s economy,” Indeed’s Hiring Lab report said of the latest JOLTS numbers. “But frozen isn’t the same as stable. A stagnant labor market may look calm on the surface, but beneath that stillness is a lack of dynamism… That is why measures like job openings, layoffs, and quits are critical metrics to watch, because they capture the flows that define the labor market’s health.”
Meaning, recent official data doesn’t reflect sparkling health — while statistics from private companies offer an even more troubling diagnosis.
Job figures released Wednesday by payroll service company ADP offered more reason to be concerned about the strength of both labor markets and the broader economy. Its analysis indicated U.S. employers cut headcounts by a net 32,000 positions in September. That followed its earlier estimate that 43,000 jobs were eliminated in August, even as businesses began seeing initial government data showing Q2 GDP expansion.
“Despite the strong economic growth we saw in the second quarter, this month’s release further validates what we’ve been seeing in the labor market, that U.S. employers have been cautious with hiring,” said ADP chief economist Nela Richardson of the findings.
Some observers note that ADP’s reports are based on payroll data of 26 million people employed by its customer companies. That provides it a large, but still partial snapshot of the private sector — and involves no public hiring that BLS statistics include.
But with BLS cancelling publication of its own data for September amid the government shutdown, ADP is offering one of the only insights on the labor market’s health for the foreseeable future. Meanwhile, it’s unclear just how reliable economists and stock markets will view the official agency’s stats over time.
Although President Donald Trump withdrew his nomination this week of the activist conservative economist he’d tapped to take over BLS — despite his past calls for the agency to cease producing its monthly jobs report and other critical data — the agency’s future remains in limbo. The credibility of its data may also increasingly be called into doubt.
Trump fired the previous BLS director after the agency significantly revised earlier employment statistics downward, appearing to indicate his policies were undermining job creation. In making the move, Trump claimed the lower numbers were “phony” in a social media post, and called them intentionally “RIGGED in order to make the Republicans, and ME, look bad.”
That accusation — along with Trump’s effort to fire Federal Reserve board members and pressure chairman Jerome Powell into making large interest rate cuts — has led some critics fear he might install a new BLS leader with orders to produce statistics tailored to flatter his economic stewardship. If so, that would make it even harder for business leaders to assess labor markets and the economy than it is now.