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Economists say job market is cooling but ‘not falling off a cliff’
A recent string of high-profile layoffs have taken up headlines and caused anxiety in the workforce.
Companies announced 153,074 layoffs in October, adding up to 1.1 million cut announcements for the year, according to outplacement firm Challenger, Gray & Christmas. That makes it the worst year for layoff notices since 2009, CNBC reported.
But job experts say they’re not in panic mode. Layoff news doesn’t paint the whole picture of the job market. Private data around job openings, payrolls and employee sentiment show that hiring is cooling but “not falling off a cliff,” says Glassdoor chief economist Daniel Zhao.
The Challenger monthly data can be volatile, for one, and layoff announcements haven’t yet shown up in state-level weekly filings for unemployment benefits, which are still being released during the shutdown.
“I’m not alarmed,” says Laura Ullrich, Indeed’s director of economic research. The latest available data “does not seem today to indicate that we’re going into a high layoff period for the overall economy.”
Government shutdown and layoffs are hitting worker confidence
While economists aren’t predicting a recession anytime soon, news of layoffs and the government shutdown is hitting worker confidence.
The share of Glassdoor reviews mentioning layoffs is up 22% year-over-year as of October, according to data from the jobs site. Workers’ confidence in the job market is down from a small rise in September and is close to a recent record-low set in June, according to Glassdoor data.
Senior-level employees saw the biggest drops in confidence over the last year, dropping 4.6 percentage points since October 2024.
That’s concerning since leadership confidence spreads to other employees through hiring and investment plans. If senior leaders aren’t confident their business is doing well, they could decide to reduce hiring or lay people off, Zhao says.
Meanwhile, for those on the market, fewer people say they’ve gotten a job offer and declined it, signaling they have less leverage and might be settling for jobs rather than holding out for better ones, according to Glassdoor data.
Health-care openings are making up for losses elsewhere
Many workers are additionally competing for a smaller pool of opportunities. As of Oct. 31, job postings on Indeed are at their lowest level since 2021, continuing a declining trend for the last four years.
Job postings are lowest in areas hit by the government shutdown, including Washington, D.C., and recent tech layoffs, like California and Washington.
Openings are concentrated in health-care sectors, security and safety, and engineering, which on the whole are keeping the job market stable.
“I see it a tale of two economies,” Ullrich says. “There are certain fields where jobs are continuing to be added, and there’s others that are shedding jobs.”
Health care and private education jobs have propped up the labor economy for some time: They make up about 17% of the jobs nationally but have accounted for 56% of job growth between July 2023 and July 2025.
“If health-care employment started dipping that would ring alarm bells for me,” Ullrich says.
The bigger picture: ‘The job market is in a funk’
Economists say available datasets can provide a pretty good picture of the job market, but official data from the Labor Department around hiring and unemployment are necessary for a best look at the health of the labor economy.
The unemployment rate remained steady 4.3% in August, the last month of available government data.
The Bureau of Labor Statistics missed another jobs report Friday due to the government shutdown. Economists surveyed by Dow Jones expect it would have shown a drop in 60,000 jobs and a rising unemployment rate to 4.5%, CNBC reported.
The numbers we do have point overall to a continuously slowing job market. Economic uncertainty is weighing on employers’ willingness to hire, Zhao says, meaning job-seekers are frozen out of the market and employed workers have less leverage to progress in their careers, win raises and stay engaged in the workplace.
Hiring experts say building your network and asking for referrals are the best ways to get a job right now. To stand out in a competitive market, consider sharpening your resume to be outcomes-based, building your personal brand on LinkedIn and doing mock interviews, GrowthLoop senior recruiter Kathleen Nolan previously told CNBC Make It.
“Overall, I would say that the job market is in a funk right now,” Zhao says. “Even if unemployment is even [and] some of the top line indicators still point to a job market that is not historically bad, that doesn’t necessarily mean that people are happy with where the job market is today.”
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