Employment
Unemployment, payrolls, jobless claims, job openings and wages
Employment
Unemployment rate
Unemployment Rate
4.2%
1 wk
↑ +0.1%
1 mo
↑ +0.1%
1 yr
↓ -0.2%
Source: FRED
Notes
- What is happening
- Unemployment rose to 4.2% in September, from 4.1% in August; payrolls fell back to +29,000, and August's +162,000 was revised to +133,000.
- Why it matters
- Employment is the Fed's other mandate and the demand side of inflation: a labour market that holds up keeps wages and services prices firm.
- What's driving it
- Slower immigration and an aging workforce shrink the supply of labour, so weak hiring has not lifted unemployment much.
- What to watch
- The FOMC cut its end-2026 unemployment projection from 4.3% to 4.1% in September, which is what freed it to raise rates — and September is already above it; a reading above 4.5% would switch its attention from inflation back to jobs.
Payroll Growth
Nonfarm payrolls, change on the previous month, in thousands of jobs
Nonfarm payrolls, monthly change (thousands)
29
1 mo
↓ -104
1 yr
↓ -47
Source: BLS, via FRED
Notes
- What is happening
- The economy added 29,000 jobs in September, and August's rebound was revised from 162,000 to 133,000, July from +21,000 to −10,000; May and June had given 63,000 and 31,000, February −156,000. The three-month average is about 50,000, against 150,000 to 200,000 a month before 2025.
- Why it matters
- Payrolls are the most watched measure of the economy's health, and the one that moves markets on the first Friday of the month; a labour market adding fewer than 100,000 jobs a month is no longer absorbing new entrants.
- What's driving it
- Hiring concentrated in health care and local government, manufacturing and retail shedding jobs, and a labour supply reduced by slower immigration, which lowers the number of jobs needed to keep unemployment stable.
- What to watch
- A three-month average that stays below 50,000, or a negative month outside a strike, would be the recession signal the unemployment rate has not yet given; above 150,000, the Fed can keep tightening.
Jobless Claims
New filings for unemployment benefits each week, and the number still receiving them
Initial jobless claims (thousands)
199
1 wk
↑ +1
1 mo
↓ -8
1 yr
↓ -34
Continued claims (thousands)
1,710
1 wk
↓ -4
1 mo
↓ -55
1 yr
↓ -219
Initial claims
Source: Department of Labor, via FRED
Continued claims
Source: Department of Labor, via FRED
Notes
- What is happening
- 197,000 initial claims in the week of October 3, after 199,000 the week before: a full month below 200,000. Continued claims are 1.72 million (September 26), up 17,000 on the week but about 200,000 below a year earlier.
- Why it matters
- Claims are the fastest labour-market indicator: weekly, published on Thursday, without heavy revisions. They rise before the unemployment rate at every turning point.
- What's driving it
- Few layoffs — firms are holding on to staff after the shortages of 2022 — but slow rehiring: those who lose a job stay on benefits longer, which is why continued claims stay high relative to initial claims that sit still.
- What to watch
- Initial claims sustained above 250,000 have preceded every recession since 1970; continued claims above 1.9 million would say long-term unemployment is setting in.
Job Openings
Positions employers are trying to fill, and how many unemployed there are for each one
Job openings (millions)
7.08
1 mo
↓ -0.26
1 yr
↑ +0.16
Unemployed per job opening
0.99
1 mo
↑ +0.05
1 yr
↓ -0.07
Job openings rate
4.3%
1 mo
↓ -0.1%
1 yr
↑ +0.1%
Job openings
Source: BLS (JOLTS), via FRED
Unemployed per job opening
Source: BLS, via FRED
Notes
- What is happening
- 7.08 million openings in August, an openings rate of 4.3%, against 12.2 million at the March 2022 peak. With 7.0 million unemployed in August and 7.1 million in September there is now one unemployed person per opening (0.99), against half of one in 2022.
- Why it matters
- Unemployed per opening is the labour-market tightness measure the Fed cites most: below 1, employers compete for candidates and wages accelerate; above it, the balance of power flips.
- What's driving it
- Openings have melted without a wave of layoffs: firms simply stopped posting positions they could not fill. The rebalancing came from the top, which let wage inflation slow without unemployment rising.
- What to watch
- A ratio clearly above 1.2 would signal a labour market in excess supply, the 2010-2017 regime; openings below 6.5 million would confirm that firms have stopped hiring.
Wage Growth
Three measures of how fast pay is rising: average hourly earnings, the Atlanta Fed's wage tracker and the employment cost index, all year on year
Average hourly earnings, year on year
3.0%
1 mo
↓ -0.1%
1 yr
↓ -0.8%
Atlanta Fed wage growth tracker
3.9%
1 mo
↓ -0.2%
1 yr
↓ -0.3%
Employment cost index, wages, year on year
3.1%
1 yr
↓ -0.4%
Source: BLS and Atlanta Fed, via FRED
Notes
- What is happening
- Average hourly earnings are up 3.0% on the year in September, the slowest since 2021; the employment cost index 3.1% in the second quarter. The Atlanta Fed's wage tracker, which follows the same people a year apart, has eased back to 3.9%.
- Why it matters
- Wages are the main cost in services, half of the consumption basket: wage growth above 3.5% is hard to square with 2% inflation without productivity gains.
- What's driving it
- A labour market that has loosened since 2022, and inflation that has eaten part of the raises; with prices at 3.4%, real wages are slipping slightly, which weighs on consumption.
- What to watch
- Hourly earnings below 3% with inflation above 3% would mean falling real wages, the scenario that breaks consumption; the wage tracker above 4.5% would say instead that the wage-price spiral is not over.