U.S. Payrolls Seen Rising 65,000 in October as Fed Hike Odds Increase

Q: With U.S. hiring rebounding in late 2026, will the Federal Reserve's potential rate hike trigger a sudden wave of corporate layoffs?

Probably not. The data in hand point to a labor market that is cooling, not cracking, so another Fed rate hike would be more likely to deepen a slow-hiring environment than trigger a sudden economy-wide wave of layoffs. The main evidence is that firing remains unusually low. Initial jobless claims are still near historic lows, the insured unemployment rate is around 1.1%, and economists increasingly describe the market as “low hire, low fire.” September payroll growth was weak at 29,000, but unemployment rose only to 4.2%, partly because more people entered the labor force, not because layoffs surged. Wage growth has also eased to about 3.0% year over year, which reduces pressure on the Fed without signaling broad labor distress. A rebound in October hiring to around 65,000 would reinforce the view that employment is stabilizing. Fed officials have already said inflation remains too high and that another year-end hike is possible if data stay firm. That would keep borrowing costs restrictive, but a single 25-basis-point move is unlikely by itself to suddenly force mass cuts across corporate America. The bigger risk is sector-specific. Technology and startups remain more exposed because higher rates can weaken funding and raise pressure to cut costs, and many 2026 layoffs have also been tied to AI restructuring rather than demand collapse. If layoffs rise, they are more likely to build gradually in vulnerable industries than erupt suddenly across the whole economy.

3 articles · Updated · en.bloomingbit.io · Nov 1

Economists expect October nonfarm payrolls to rise by 65,000 on Nov. 6, more than double September's gain, with unemployment seen holding at 4.2%.
That combination would signal a still-stable labor market and strengthen the Federal Reserve's case for another rate increase as inflation pressures persist.
September job openings due Nov. 3 are projected to edge up, while weekly initial jobless claims on Nov. 5 are expected to stay near multi-decade lows, reinforcing the stability view.
Bloomberg Economics still sees weakening momentum: job losses are gradually increasing, and a labor market with both low hiring and low firing is losing steam.
Other gauges this week include October manufacturing data, trade figures that may show a wider AI-driven import deficit, and third-quarter productivity growth forecast at 2.6%.