What to expect in Thursday’s jobs report

By Alicia Wallace, CNN

(CNN) — One of the most hotly anticipated economic reports is finally set to be released Thursday: The long-delayed jobs report for September, originally due on October 3. It marks the reopening of the floodgates for a slew of backlogged economic data that was held up due to the historic government shutdown.

Sitting on the shelf for six weeks, the months-old data has the potential to come across as stale – especially for a fast-moving economy that is feeling increasingly perilous for many Americans and businesses.

Economic uncertainty and the rising cost of living have caused consumers to pull back (as The Home Depot and Target can attest). Affordability concerns are reaching a fever pitch (so much so that President Donald Trump exempted some grocery store items like coffee, beef and fruit from steep tariffs).

However, the end of the federal data drought provides a much-needed look at how the economy fared in recent weeks and what’s in store for the months to come.

Plus, Thursday’s report might very well be the last clean jobs report for a couple of months, since the shutdown mucked up the finely tuned process of data collection and analysis during October and part of November. As such, it will provide a critical baseline of the US labor market entering the fourth quarter.

Economists are expecting 50,000 jobs were added in September and that the unemployment rate held steady at 4.3%, according to FactSet. The consensus estimates would mark a pickup from August’s preliminary 22,000-job gain.

If September job gains come in as expected at 50,000, they will keep this year on course for the weakest employment growth since the pandemic and, before that, the Great Financial Crisis.

“I’m not expecting huge changes in the (September) report, relative to past reports,” said Allison Shrivastava, economist at the Indeed Hiring Lab. “I really just expect this continuation of this anemic job market that we’ve seen.”

It’s been a low-hire, low-fire slog of a labor market where the lion’s share of job gains has occurred in health care and social services.

That trend was largely confirmed by a host of private sector labor market data released during the shutdown.

Still, while economists aren’t expecting many surprises, Thursday’s report doesn’t come without some fairly big risks – especially for the consideration of monetary policy. The Federal Reserve trimmed interest rates by a quarter point on October 29 with a backdrop of a “less dynamic and somewhat softer labor market,” Fed Chair Jerome Powell said at the time.

“Anything that looks kind of ugly now has had the potential to fester for a little bit longer, for the six weeks before we got a better eye on it,” Oliver Allen, senior US economist at Pantheon Macroeconomics, told CNN.

‘A precarious place’

Job growth was expected to slow following the post-pandemic economic recovery; however, it’s been practically listless the past several months. Since May, job gains have averaged 31,000 per month, which is about one-fifth of the average seen in 2024, BLS data shows.

“We’re in this place of such uncertainty because there’s so much change in policy,” Shrivastava said, noting the frequently changing tariff rates imposed by the Trump administration.

The economy has continued to expand in recent months and consumer spending has held up; however, it’s wealthier Americans who are propping up those outlays.

“This is already a pretty precarious spending situation that could really topple,” she said.

The bifurcation (also widely known as K-shaped or two-lane) in the spending environment has further contributed to the bifurcation in the labor market. Aside from health care, social services and leisure and hospitality (to some extent), job gains have been flat or negative in many industries, she said.

In addition to uncertainty around trade policy, factors such as immigration, artificial intelligence, federal employment and funding cuts, high interest rates and pandemic-era overhiring are serving as headwinds, she said.

And that in turn, will continue to put downward pressure on wages and serve as barriers for people trying to break into or re-enter the labor market, she said.

Continuing jobless claims, which are submitted by people who have filed for at least a week or more of unemployment, have been hovering at around four-year highs, Department of Labor data shows. The latest claims data, which was filled in partially this week, showed that continuing claims were 1.957 million as of October 18, the highest since August.

“We’re in a precarious place, we’re in an anemic place, but not necessarily something wholly negative,” Shrivastava said.

A more ‘upbeat’ outlook for 2026

Still, layoff activity hasn’t worrisomely accelerated: First-time claims for unemployment benefits were 232,000 as of October 18, a tally that was in line with September.

If claims are “in the order of, 300,000 to 400,000 and once we kind of are consistently above that level, then I’d start to be a little more worried about the job market in general,” Oren Klachkin, financial market economist at Nationwide, told CNN.

At this point, Klachkin and other Nationwide economists “don’t see a recession on the horizon anytime soon.”

“If I had to put a metaphor around it, it’s like we’re at the end stages of a marathon for the labor market,” Klachkin said. “We came out of the pandemic with extremely robust gains in job growth, and now we’re reaching the end stages of this so-called race, where the job market is looking a bit softer, a bit slower and is potentially at risk, just given where we are in the cycle.”

The labor market is vulnerable to a crash-out; however, the odds are still in favor of it trudging across the finish line and to a point where it could get refueled early next year by increased certainty around tariff rates as well as a potential fiscal boost from the tax and spending bill.

“In the earnings results for the third quarter, the corporate sector is still essentially signaling that we can be relatively upbeat about the economy into next year,” Klachkin said.

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