Employers expected to add 65,000 jobs in October as inflation squeezes wages

The U.S. job market likely rebounded in October after a weak September, but the recovery may not be enough to ease pressure on workers dealing with high prices. Forecasters surveyed by FactSet expect the Labor Department to report that employers added 65,000 jobs last month. They also predict the unemployment rate will hold steady at 4.2%.

The data arrives three days after voters gave President Donald Trump and the Republican Party a sharp loss in the midterm elections. Americans who were frustrated with the cost of living handed full control of Congress to Democrats. Despite this political shift, the economy has shown resilience against recent shocks, including Trump’s double-digit import taxes and the war with Iran, which pushed gasoline prices above $4 a gallon.

Economic growth has remained strong. Gross domestic product grew at a 3.4% annual pace from July through September. This expansion was driven by robust consumer spending and increased investment in artificial intelligence. Hiring has been solid but lacks momentum. Employers have added an average of 68,000 jobs per month this year, including a disappointing 29,000 in September. This marks an improvement over 2025, when the monthly average was just 9,700 jobs, the weakest performance outside of a recession since 2002.

However, current hiring rates fall well short of historical norms. The average monthly job creation in 2023 and 2024 was 166,000. During the post-pandemic boom in 2021 and 2022, employers added 491,000 jobs per month. Economists describe the current environment as having low firing and low hiring. Companies are reluctant to lay off existing staff but are not rushing to recruit new employees. This dynamic often leaves young workers and those who have lost jobs struggling to find positions.

The number of new jobs needed to keep unemployment stable has dropped significantly. In late 2023, the break-even point was approximately 166,000 new jobs per month. According to an estimate from Yale University’s Budget Lab, which used a Federal Reserve report, that figure is now just over 5,000. Fewer people are competing for work due to baby boomer retirements and the administration’s immigration crackdown.

Rising prices continue to erode the value of wages. After adjusting for inflation, average hourly earnings fell 0.7% in September. This marks the sixth consecutive year-over-year decline in real pay, a trend that likely contributed to voter dissatisfaction during the midterm elections.