October Jobs Report: What Economists Expect for Hiring and Unemployment

October’s jobs report will test whether September’s weak headline was a temporary dip or part of a slower hiring pattern. Economists’ forecasts vary widely, from 50,000 to 95,000 new jobs, while most expect unemployment to stay near 4.2%. The report is due Friday, November 6, at 8:30 a.m. Eastern Standard Time.

September’s report set a low bar

The U.S. added 29,000 jobs in September, well short of economists’ 93,000 consensus forecast. Revisions also cut the combined July and August totals by 60,000: July’s estimate moved from a loss of 31,000 jobs to a loss of 10,000, while August’s gain was revised from 133,000 to 29,000. The unemployment rate, calculated from a separate survey, rose from 4.1% to 4.2%.

Federal Reserve Chair Kevin Warsh described the broader employment picture as positive after the October Fed meeting. He pointed to the 4.2% jobless rate, which was lower than a year earlier, payroll growth above last year’s pace, and a four-week average of unemployment insurance claims at its lowest level in generations. That assessment sits alongside September’s disappointing payroll count: one monthly report can be weak even while other measures suggest the labor market remains steady.

David Payne, a staff economist and reporter at The Kiplinger Letter, expects monthly job gains below 100,000 to become more typical. That would mark a slower pace than six-digit monthly increases, but the October forecasts suggest economists differ on how much hiring has recovered.

ADP points to continued private-sector hiring

The ADP National Employment Report estimated that private payrolls grew by 86,000 in October. That was below September’s 90,000, but ahead of economists’ 75,000 expectation. Trade, transportation and utilities; education and health services; and leisure and hospitality recorded the largest gains. Professional and business services, along with natural resources and mining, had the largest declines.

Economists will compare the ADP estimate with the Bureau of Labor Statistics’ nonfarm payroll figures, which cover a broader measure of employment. The two reports can differ, so the ADP result offers one indication of private hiring rather than a substitute for the monthly jobs report.

Forecasts range from cautious to upbeat

Deutsche Bank economists expect headline payrolls to rise by 55,000, up from September’s 29,000. They also forecast a 55,000 increase in private payrolls, compared with 46,000 in September. Their estimate would bring hiring closer to recent three-month averages. They expect unemployment to hold at 4.2%, average weekly hours to remain at 34.4, and average hourly earnings to rebound by 0.3%, after a 0.1% increase. Their payroll measure of year-over-year nominal compensation growth would edge down by a tenth of a percentage point to 4.1%, a pace they see as consistent with solid consumer spending growth.

Marc Giannoni, chief U.S. economist at Barclays, forecasts 50,000 new nonfarm jobs and a decline in unemployment to 4.1%. Without further revisions, his estimate would put average monthly gains over the three months through October at 71,000, compared with 28,000 over the three months through July. Giannoni says that combination could keep an interest rate increase in consideration for the December Federal Open Market Committee meeting as it weighs incoming data.

Raymond James chief economist Eugenio J. Alemán sees signs of stability in ADP’s October report. He noted that private employment rose by 86,000, with workers drawn to new positions by higher pay, bonuses and more hours. Businesses of every size added jobs, he said, while manufacturing employment declined and construction employment expanded, supported by data center construction. The Friday report will show whether the broader payroll count reflects a similar pattern.

RSM chief economist Joseph Brusuelas offers the highest forecast among those cited: a net gain of 95,000 jobs. He connects that outlook to stable jobless claims and reported third-quarter economic growth of 3.4%. RSM expects unemployment to remain at 4.2%. Brusuelas also points to an 11.5-week median duration of unemployment and a slow rise in the number of people out of work for at least 27 weeks, which he puts at 1.94 million out of a potential labor force of 170 million.

Wells Fargo economists expect 65,000 new jobs, roughly in line with the average pace of the past six months, and unemployment of 4.2%. They describe a broadly balanced labor market: initial claims remain historically low, job openings have moved sideways, and regional manufacturing employment measures softened modestly but remained in expansion territory for goods and services. They expect a recent recovery in labor force participation to lose momentum amid population aging and low net immigration.

Guy Berger, senior advisor on labor markets at Access/Macro, expects a stronger report than September’s, with employment growth in the middle or upper double digits and unemployment slightly lower. He sees two possible explanations: delayed catch-up in the Bureau of Labor Statistics data after September’s weak result, and a mixed set of alternative indicators whose softer readings were concentrated in late October. If that late-month weakness continues, Berger says it may matter more for November’s report.

What to watch when the figures arrive

The headline payroll number will get attention, but revisions, unemployment, wages and hours worked will help fill in the picture. The forecasts do not point to one agreed direction: hiring estimates span 45,000 jobs, and economists differ on whether unemployment will hold at 4.2% or dip to 4.1%. The release will show whether September’s slowdown gave way to a modest rebound, and whether pay growth and participation support the steadier picture some economists describe.

For related reading, see what to look out for in economic data this week and Kiplinger’s economic forecasts.