U.S. layoffs have dropped to their lowest level in four years, while employer hiring plans have increased 3% this year, according to new labor-market data.
Employers announced 573,195 job cuts through September, nearly 40% fewer than during the first nine months of 2025, Challenger, Gray & Christmas said Thursday. September layoffs fell 20% from a year earlier to 43,281, marking the lowest monthly total in four years, according to the outplacement firm.
The figures indicate that the U.S. labor market remains resilient, even though hiring has cooled from the strong pace seen in the years following the pandemic. The data was released one day before the Labor Department’s monthly jobs report. Economists expect employers to have added 90,000 jobs in September, while average monthly gains over the past three months have totaled 71,000.
“The labor market is somewhere between stable and reaccelerating,” PNC Economics analysts wrote in a Sept. 30 research note. “We’re seeing early signs that wage growth may be picking up again, which could make it more difficult for the Fed to reduce inflation without raising rates.”
Another indication that companies are holding on to workers came from weekly unemployment data. Initial jobless claims for the week ending Sept. 26 fell by 1,000 to 197,000, the Labor Department said Thursday.
“Jobless claims continue to defy expectations and remain exceedingly low, dovetailing with the JOLTS report’s layoff rate,” Oxford Economics said in a Thursday research note. The firm was referring to data from the Job Openings and Labor Turnover Survey released Tuesday. “While businesses aren’t hiring at a rapid pace, they are reticent to let their current crop of workers go,” the note said.
The JOLTS report showed that the overall rate of worker separations—including layoffs and voluntary resignations—was unchanged from the previous month. Hiring, however, increased 3.3%.
The steady labor-market data has given the Federal Reserve room to raise interest rates as it works to bring inflation back toward its 2% annual target. Last month, the central bank announced its first rate hike in three years after inflation accelerated this year amid higher energy costs linked to the Iran war.
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Economists say additional rate hikes could come later in 2026. CME FedWatch indicates that the Fed is likely to leave rates unchanged at its October meeting, but the tool puts the odds of a quarter-point increase at the December meeting at 60%. The central bank does not hold a monetary policy meeting in November.
Hiring plans in 2026
During the first nine months of the year, U.S. employers announced plans to hire 210,612 workers, a 3% increase from the same period a year earlier, Challenger, Gray & Christmas said.
“Hiring plans are up over the year, but we’re not seeing the surge of hiring plans that come with the holiday season, which suggests a very cautious approach,” Andy Challenger, workplace expert and chief revenue officer at Challenger, Gray & Christmas, said in a statement.
Spirit Halloween and Michaels have announced plans to hire 62,000 seasonal workers in 2026, down from the 100,800 positions planned last year, Challenger, Gray & Christmas said.
