The October jobs report, due Friday at 8:30 a.m. ET, is expected to show nonfarm payrolls rising by 59,000, according to the Dow Jones consensus, after 29,000 jobs in September. Economists expect the unemployment rate to hold at 4.2%. Taken alone, that looks like a steady market. The report itself suggests the steadiness is partly an illusion.
The argument for calm rests on a shrinking labor force. Nicole Bachaud, a labor economist at ZipRecruiter, said fewer jobs are needed to keep unemployment level when fewer people are looking for work, pointing to an aging workforce, low birth rates and reduced immigration. That is a plausible explanation. But it also means the headline unemployment rate is a weaker signal than it appears. The labor force has contracted by 434,000 since January 2025, and the participation rate has fallen to 61.8%.
The data also show a problem that the headline number hides. Long-term unemployment is up by 495,000 workers since January 2025, and the average duration of unemployment has reached 24.8 weeks, an increase of 2.8 weeks. Bachaud described the difficulty plainly: workers who have jobs are relatively secure, but people who lose them face a market where few employers are hiring and few workers are quitting. For them, a 4.2% rate offers little comfort.
Policymakers should stop treating the unemployment rate as the single measure of labor market health. Officials at the Federal Reserve should weigh duration of unemployment, participation and wage trends alongside it, especially for lower-wage workers, as Bachaud suggested. Initial jobless claims near 189,000 and 3.36 million quits show that layoffs remain low, which is genuinely good news. Yet the combination of weak hiring and rising long-term joblessness points to a market that is stable for incumbents and hard to enter for everyone else.