U.S. September corporate layoffs hit a four-year low for the same period, but hiring intentions fell to the lowest level in fifteen years for the same period

The U.S. labor market presents a contradictory picture: while layoff activity continues to cool, companies are also reluctant to expand hiring, reflecting a general wait-and-see attitude amid multiple uncertainties in the business world.

According to a report released Thursday, October 1, Eastern Time by outplacement firm Challenger, Gray & Christmas Inc., the number of layoffs announced by U.S. companies in September dropped by nearly 20% year-on-year to 43,281, the lowest September figure since 2022. On the same day, data released by the U.S. Bureau of Labor Statistics showed that initial jobless claims in the U.S. stayed below 200,000 for a third consecutive week, nearing historical lows not seen since 1969.

However, another aspect of the labor market warrants caution. Companies' announced hiring plans for September amounted to only 90,787, a 23% year-on-year decline and the lowest September figure since 2011. The typical surge in seasonal hiring associated with the holiday shopping season failed to materialize, indicating employers’ cautious outlook toward the future economic trajectory. The Federal Reserve’s rate hikes, high energy prices, and ongoing instability in Iran are the main factors dampening companies’ willingness to recruit.

The Challenger report shows that the number of layoffs in September fell 18% month-on-month, with companies announcing a total of 573,195 layoffs in the first nine months of this year, down 39% from 946,426 in the same period of 2025; planned layoffs in Q3 plunged 43% year-on-year.

Data released the same day by the U.S. Bureau of Labor Statistics showed that as of the week ending September 26, initial seasonally adjusted state jobless claims stood at 197,000, down 1,000 from the previous week and below the 200,000 expected by economists polled by Reuters. Claims have remained below 200,000 for three consecutive weeks, approaching the lowest levels since 1969.

Continuing jobless claims have also dropped, falling to a seasonally adjusted 1.701 million for the week ending September 19, the lowest since April 2023.

Some economists point out that if historically low layoff numbers persist, there may be concerns about an overheated labor market. Stephen Stanley, Chief U.S. Economist at Santander US Capital Markets, said, "For now, we are still far from that outcome, but it’s a new risk that the Federal Open Market Committee (FOMC) is watching."

Despite a slowdown in layoffs, companies’ willingness to increase hiring has shrunk in parallel. The number of hiring plans announced in September rebounded significantly from August’s 12,325, but compared to the same period last year, it dropped 23% and hit the lowest September level since 2011.

Andy Challenger attributed this phenomenon to multiple pressures in his statement. “Companies are currently in a wait-and-see period,” he said. “Employers are facing high energy costs, uncertainty over the prospect of war in Iran, interest rate hikes that may increase hiring costs, and potentially soaring healthcare expenses.”

The September FOMC meeting of the Federal Reserve unanimously approved the first rate hike in three years and indicated a further tightening of monetary policy. CME’s tool shows that the market currently estimates about a 37.1% probability the Fed will raise rates again at its October 27-28 meeting, down significantly from 68.6% a week prior.

Carl Weinberg, Chief Economist at High Frequency Economics, stated, “At some point, persistently high energy and raw material costs will force companies to cut marginal staff to protect profit margins, but for now there’s no sign of this happening.”

By industry, tech companies announced 10,799 layoffs in September, a 77% surge from 6,103 in August.

In the first nine months of this year, total layoffs in the tech sector accounted for 29% of all layoffs, ranking top among all industries.

Notably, the main reason for September layoffs was market and economic conditions, but viewed across the full year, artificial intelligence (AI) has become the most frequently cited reason for layoffs, accounting for about 21% of all planned job cuts.

The above data serves as a leading indicator for the U.S. September nonfarm payroll report to be released Friday.

According to reports, the market consensus is that nonfarm payrolls for September will rise by around 90,000, with the unemployment rate remaining unchanged at 4.1%.

A survey released Tuesday by the Conference Board showed that the share of consumers in September who believe jobs are “plentiful” dropped to the lowest since February 2021, while the proportion believing jobs are “hard to get” climbed to the highest in more than five and a half years, indicating that ordinary workers’ subjective perception of the job market has clearly turned more pessimistic.