There's no jobs report. Here's what six recent analyses show instead.

Due to the government shutdown, official October jobs data was unavailable, leading analysts to rely on private sector reports that collectively indicate a softening labor market. ADP reported a modest gain of 42,000 private sector jobs, primarily from large companies, though federal layoffs are expected to offset this. Concurrently, announced job cuts surged to 153,074, the highest October total since 2003, driven by post-pandemic corrections and economic headwinds, while Indeed data showed job postings at their lowest since 2021. Small business hiring significantly weakened, attributed to high borrowing costs and operating expenses, painting a picture of a challenging and less dynamic employment landscape despite Bank of America data suggesting no further significant slowdown in the overall labor market.

Analysis

The absence of official BLS data due to the government shutdown has necessitated reliance on private sector reports, which collectively paint a picture of a softening U.S. labor market in October. ADP reported a modest gain of 42,000 private sector jobs, primarily from large companies, though this was partially offset by an expected cancellation from federal layoffs. This data gap creates uncertainty, with even alternative sources noting muddied clarity without BLS calibration.

Announced job cuts surged dramatically to 153,074 in October, marking the highest total for the month since 2003 and pushing year-to-date cuts over 1 million. This increase is attributed to post-pandemic overhiring corrections, AI adoption, and softening consumer/corporate spending. Concurrently, Indeed data showed job postings at their lowest level since 2021, indicating a significant cooling in demand.

Small business hiring significantly weakened, with net hires falling by 5,900, the first drop since January, driven by persistently high borrowing costs (7-15%) and elevated operating expenses. While Bank of America data suggested no further significant slowdown in the overall labor market, LinkedIn data corroborated a slow job market with declining hiring momentum. The current environment suggests a precarious, rather than dangerous, labor market, with employers largely holding onto workers despite new cuts.

Key Decisions for Investors

• Monitor private sector labor market indicators closely for signs of further deceleration, particularly announced job cuts and small business hiring trends, given the official data vacuum.
• Assess portfolio companies' exposure to rising operating costs and high borrowing rates, especially those reliant on small business activity or facing post-pandemic overhiring corrections.
• Consider the potential impact of future Federal Reserve interest rate decisions on labor market dynamics, as rate cuts are anticipated to alleviate pressure on small businesses and potentially stimulate hiring.