U.S. employers announced fewer layoffs in September but hiring plans so far this year were the lowest since 2009, a report said on Thursday, adding to evidence of a labor market standstill as the demand and supply of workers fall because of policy and technology advances.
The report from global outplacement firm Challenger, Gray & Christmas does not normally attract much attention. But together with other private data, it has become more prominent due to a U.S. government shutdown that has led to major economic releases being suspended, including the closely watched employment report for September that was due on Friday.
The 15th government shutdown since 1981, which will lead to the furlough of 750,000 federal workers, has also delayed the publishing of the weekly jobless claims report, August factory orders and construction data. The trade report is also likely to be affected.Â
Challenger, Gray & Christmas said planned job cuts dropped 37% month-on-month to 54,064 in September. Employers have so far this year announced 946,426 job cuts, the highest year-to-date since 2020.Â
Hiring plans so far this year have totaled 204,939, the lowest year-to-date since 2009 when the economy was just emerging from the Great Recession.Â
Labor Market Is Stagnating
“Right now, we’re dealing with a stagnating labor market, cost increases and a transformative new technology,” said Andrew Challenger, senior vice president at Challenger, Gray & Christmas. “With rate cuts on the way, we may see some stabilizing in the fourth quarter, but other factors could keep employers planning layoffs or holding off hiring.”
The Federal Reserve resumed easing policy last month, cutting its benchmark overnight interest rate by 25 basis points to the 4.00%-4.25% range, to aid the labor market.
Economists say lingering uncertainty from President Donald Trump’s trade policy, immigration raids and the rise of artificial intelligence, have combined to reduce demand and labor supply. Nonfarm payroll gains averaged only 29,000 jobs per month in the three months to August compared to 82,000 during the same period last year.
Challenger said the government accounted for the bulk of planned layoffs, with 299,755 job cuts announced so far this year, part of an unprecedented campaign by the White House to reduce the federal workforce. Trump threatened to fire more federal workers if there was a shutdown.
The surge in AI is costing jobs in the technology sector, with companies in the industry announcing 107,878 layoffs so far this year. Challenger said AI was also making it difficult to land positions, particularly for entry-level engineers.
Should the shutdown persist into next week, September’s consumer price, retail sales, housing starts and producer inflation reports will probably not be published, impacting decision making by households, investors and policymakers.
(Reporting by Lucia Mutikani; Editing by Nia Williams)
