The scale of US layoffs plummeted 71% in October! The non-agricultural college exam is about to reach the end of the market's re-examination of the Fed's interest rate hike

The Zhitong Finance App learned that the US non-farm payroll labor market still shows a resilient situation of “low layoffs and careful expansion.” In October, the company announced 43,994 layoffs, a year-on-year decrease of 71%, the lowest since 2023; the recruitment plan was close to 445,000, an increase of 57% over the previous year. However, the increase in recruitment came entirely from preparations for the holiday shopping season, and some announcements were postponed from September to October. This is why economists have not judged an overall increase in long-term employment demand based on this. The sharp year-on-year drop in layoffs also includes the impact of the unusually high base for the same period last year. Under the AI intelligence frenzy, companies still tend to use some temporary jobs to meet business expansion needs while actively controlling long-term labor costs.

Friday's non-farm payrolls report will test this employment resilience. The market expects 65,000 new non-farm payrolls to be added in October, and the unemployment rate will remain at 4.2%; Goldman Sachs and Bank of America both forecast an increase of 75,000, which is slightly higher than the consensus, and the unemployment rate is also expected to be 4.2%. Goldman Sachs expects an average hourly wage increase of 0.3% month-on-month; Bank of America believes that employment growth is still above the level needed to keep the unemployment rate stable. The judgments of the two agencies point to a moderate expansion of employment, and Wall Street has yet to price the possibility that the job market will deteriorate in a recessionary manner.

For the equity and bond market, the key is whether employment can continue to support residents' incomes and corporate profits, while wage pressure is moderately mitigated, and in line with overall inflation improvements — that is, employment growth remains stable, wage growth is moderately slowing, and overall inflation continues to fall. This combination of economic data similar to the “Golden Girl” will influence the market's judgment on how much the Federal Reserve still needs to raise interest rates and when to stop raising interest rates. It is also related to whether US stocks can obtain the dual impetus of profit support and valuation repair.

Recruitment heats up during the holiday shopping season, and companies still retain employment flexibility

The number of layoffs announced by US employers fell to the lowest level in October of every year since 2023; at the same time, recruitment plans increased as companies began preparing for the holiday shopping season.

According to data from Challenger, Gray & Christmas Inc., an employee separation and placement service company in the US, the company announced 43,994 layoffs last month, a year-on-year decrease of 71%. In the same period last year, the number of layoffs announced by the company hit the highest record in October of each year in more than 20 years.

According to Challenger data, the employer also said last month that it plans to hire nearly 445,000 employees, an increase of 57% over the previous year, the highest level since at least 2009 in October of each year.

This growth was entirely driven by the company's personnel reserves for the busy holiday shopping season. Amazon plans to hire 300,000 employees, accounting for nearly two-thirds of the total number of people in the seasonal recruitment program. United Parcel Service also announced plans to recruit 100,000 employees, according to the report.

Meanwhile, Challenger notes that the publication of seasonal recruitment announcements has been moved from September to October. Temporary employment during the holidays has also become more concentrated: only five companies announced seasonal recruitment plans this year, compared to 11 in 2025.

Andy Challenger, the company's chief revenue officer, said in a statement: “Employers hiring seasonal employees are staggering announcements and waiting longer to watch how the situation develops during this shopping season before determining the number of recruits. They haven't made significant layoffs, but they haven't promised to add more long-term employees. Seasonal jobs can provide companies with the manpower they need during the holidays, and the employment termination period is set in advance.”

The data on layoffs and recruitment plans highlights that there are few layoffs in the labor market, but employment opportunities are also limited. The October employment report released by the government on Friday is expected to show that the number of non-farm payrolls increased by 65,000, and the unemployment rate remained at 4.2%.

The primary reason cited by employers when announcing layoffs last month was the economic situation of enterprises under the erosion of the market and long-term high inflation. This reason has replaced artificial intelligence and became the main reason for layoffs this year. Recent employment data shows that in the context of high costs, some employers are still cautious about expanding the number of employees.

Resilience in employment supports growth, and Wall Street is still divided over the end point of the Fed's interest rate hike

The reduction in layoffs will help stabilize residents' income and consumption, and will also enable the Federal Reserve to continue to pay attention to inflation. On October 28, the Federal Reserve maintained interest rates at 3.75% — 4.00%, and indicated that strong economic activity, strong capital investment, and employment growth matched the labor supply; two FOMC members of the Federal Reserve advocated raising interest rates.

Goldman Sachs expects December to be the last rate hike in this round; J.P. Morgan also expects to raise interest rates by 25 basis points in December, but does not think it will enter a continuous cycle of interest rate hikes thereafter. Its concern is that the transmission of energy and import prices may still keep core inflation strong. Bank of America is more hawkish: it is expected to raise interest rates by 25 basis points each in December this year and March next year, reaching 4.25% — 4.50%, and remaining until the end of 2027.

Looking at market pricing, the combination of moderate employment growth, stable unemployment, and a slight cooling of wage pressure is most conducive to balancing corporate profits with the recovery of overall stock market valuations. If consumer demand continues to be supported, the need for further austerity may decline. In other words, moderate employment growth and stable unemployment help continue to support residents' income, consumer demand, and corporate profits; a moderate slowdown in wage growth helps reduce inflationary pressure, ease expectations of further interest rate hikes when overall inflation improves at the same time, and provide support for stock valuation repair — such a “Golden-girl” macroeconomic combination is more conducive to promoting the coordination of profit growth with valuation improvement.

If employment and wages at the same time significantly exceed expectations, expectations of interest rate hikes and US bond yields may rise again, suppressing the valuation of technology stocks. Nearly 445,000 recruitment plans are companies' employment intentions and are highly seasonal; non-agricultural statistics show net changes in actual employment and seasonal adjustments; the two cannot directly correspond. In the non-farm data reporting rules that determine the direction of transactions on Friday, it will be a combination of growth and inflation presented by jobs, wages, and the previous month's revisions.