The government shutdown means we’re flying blind on official employment data for October. No BLS report or JOLTS numbers. The White House is citing DoorDash’s state and local commerce reports – which tells you everything you need to know about how unusual this moment is.
But the labor market doesn’t stop moving just because federal agencies go quiet. So we turned to two of the most credible private sector sources available: ADP’s payroll data and Challenger Gray’s layoff tracker. What they’re showing isn’t pretty, but it’s not entirely bleak either.
The Split-Screen Economy
ADP’s October numbers reveal a market that can’t decide what it wants to be. Trade, transportation, and utilities added 47,000 jobs – the biggest gains of the month. Education and healthcare brought in another 26,000. Financial services are up by 11,000.
Then you look at the other side. The information sector – tech and media – shed 17,000 jobs. Professional and business services cut 15,000 positions, continuing a slowdown in consulting that’s been building for months. Even leisure and hospitality, which had been clawing its way back, dropped 6,000 jobs.
This isn’t a recession signal. It’s a recalibration. Some sectors are still hiring aggressively while others tighten their belts.
The Layoff Story Gets Worse
Challenger Gray’s numbers are harder to spin. October layoffs hit 153,000 – the highest monthly total in two decades. Year-to-date, we’re at 1.1 million cuts, a 65% jump from the same period last year.
Rucha Vankudre, Senior Labor Economist at Talent Neuron, points out that many of these cuts were telegraphed long before they were announced. “Workforces have been shrinking after pandemic overexpansion,” she notes. “A lot of employees were waiting for the axe to fall.”
There’s also the AI factor. Entry-level roles are taking the biggest hit as automation replaces tasks that used to require human hands. Mid-level and senior positions are still relatively stable. But if you’re just starting your career, the landscape has shifted under your feet.
Earlier this year, Fed Chair Jerome Powell described the labor market as “low-hire, low-fire.” The concern now is whether we’re sliding into “low-hire, high-fire” territory. Vankudre doesn’t think we’re there yet, but the trend line is undeniable: more unemployed people heading into 2026 than we’ve seen in years.
What This Means If You’re Still Hiring
For recruiters, this creates a paradox. More candidates are flooding the market, but that doesn’t make hiring easier or cheaper.
Joveo’s internal data shows job postings down 3% month-over-month, tracking closely with what JOLTS reported before the data blackout. But cost-per-click and cost-per-application? Both up roughly 7%. You’d think more candidates means lower costs. It doesn’t work that way.
“You’re still competing for top talent, even with more people entering the market,” says David Garrett, Joveo’s labor market economist. “The rise in application volume will likely inflate downstream costs – your cost per hire, your cost per qualified applicant – just because there are more people to filter through.”
Then there’s the AI-generated resume problem. Recruiters are seeing an influx of applications with perfect keyword matching and flawless formatting, making it harder to identify genuinely strong candidates. Quality screening tools aren’t a nice-to-have anymore. They’re essential.
The Road Ahead
The forces reshaping this market – immigration enforcement slowing labor supply, tariff uncertainty making business planning nearly impossible, AI displacing entry-level work are the structural shifts and not the temporary disruptions.
For employers still hiring, the strategy needs to adjust. Budget more for talent acquisition, not less, even as candidates become more plentiful. Invest in screening and targeting tools that can cut through the noise. And be prepared for downstream hiring costs to creep up as you wade through higher application volumes.
The labor market isn’t collapsing. But it is changing faster than the official data can track. Which means the old playbooks don’t quite work anymore.
