US layoffs plunged in September, but hiring plans slumped to their lowest level in 16 years amid economic uncertainty, according to a new report.
American employers announced 54,064 job cuts last month, a striking 37% drop from August, according to a Challenger, Gray & Christmas report released Thursday.
It’s the third time this year that layoffs came in lower than the previous month, indicating employers are easing off a path of steep back-to-back job cuts.
But so far this year, companies have announced 946,426 job cuts – the highest year-to-date total since the pandemic.
And employers – who remain uncertain about inflation, the effects of tariffs and more – are holding back on hiring.
In the first nine months of the year, US companies planned to add 204,939 jobs – down 58% from the same time last year and the lowest total since 2009 – according to the report.
“Right now, we’re dealing with a stagnating labor market, cost increases and a transformative new technology,” Andrew Challenger, a senior vice president at Challenger, Gray & Christmas, said in a statement.
“With rate cuts on the way, we may see some stabilizing in the job market in the fourth quarter, but other factors could keep employers planning layoffs or holding off hiring,” he added.
Challenger’s monthly report usually doesn’t draw much notice. But analysts and businesses are looking to the firm in the wake of the government shutdown, which has caused official jobs data to be delayed.
If the shutdown continues, the Bureau of Labor Statistics’ nonfarm payrolls report – which is considered far more comprehensive and reliable – will not be released on Friday.
The Labor Department did not publish its weekly job claims count on Thursday, as initially scheduled.
Meanwhile, the Federal Reserve – which cut rates by a quarter point last month for the first time since December 2024 – is weighing whether to slash rates again at its meeting later this month.
Weak jobs data could makes policymakers more likely to issue another interest-rate cut, since Fed Chair Jerome Powell signaled labor market struggles are now more of a concern than inflation fears.
Traders are betting on nearly 99% odds that the Fed lowers rates by another quarter point on Oct. 28 and 29, according to CME FedWatch, which tracks the likelihood that the body will change the federal funds rate.
“It’s very likely job cut plans are going to surpass a million for the first time since 2020 and for the ninth time in our series,” Challenger said.
“Previous periods with this many job cuts occurred either during recessions or, as was the case in 2005 and 2006, during the first wave of automations that cost jobs in manufacturing and technology.”
The federal government has announced 299,755 job cuts so far this year, making it the top industry for layoffs as the Trump administration has sought to reduce waste drastically.
President Trump has warned the government could see more mass firings because of this week’s shutdown.
Tech firms have announced 107,878 layoffs this year due to “disruption with AI that is not only costing jobs, but also making it difficult to land positions, particularly for entry-level engineers,” Challenger found.
Retail companies and media and news firms also announced mass job cuts this year — 86,233 and 14,060 firings, respectively — according to the firm’s report.
