Recent mass layoff announcements by major corporations have heightened concerns about accelerating deterioration in the labor market, and the latest "small nonfarm payroll" ADP weekly employment report released today confirms these fears.
Preliminary estimates from ADP Research Institute and Stanford Digital Economy Lab show that U.S. private-sector payrolls declined by an average of 11,250 per week in the four weeks ending October 25. Cumulatively, this translates to a loss of 45,000 jobs (excluding government employees) for the month—the steepest monthly employment decline since March 2023.
This aligns with a wave of corporate layoff announcements. According to outplacement firm Challenger, Gray & Christmas Inc., October saw the highest number of job cuts announced for this period in over two decades, raising alarms about the labor market's health.
**Persistent Layoffs Worsen Labor Market Conditions** ADP began releasing more frequent labor market data last month as a supplement to its traditional monthly reports. These figures are based on four-week moving averages and are published with a two-week lag.
The continued rise in layoffs is particularly concerning amid low hiring rates and elevated difficulty for job seekers. Goldman Sachs notes that while the tech sector saw a notable increase in layoffs across two key metrics in October, there is no clear evidence yet that most cuts are directly driven by artificial intelligence.
Meanwhile, initial jobless claims—a less volatile and more representative indicator (though it may lag behind layoff announcements and WARN notices)—remain low.
Goldman Sachs has developed a new tool tracking earnings call transcripts to monitor layoff discussions. The tool reveals increased focus on workforce reductions, especially in ongoing Q3 2025 earnings calls. The research finds that discussions about layoffs tend to rise after repeated mentions of AI, though this pattern is only beginning to emerge in non-tech firms.
Goldman combines Challenger layoff announcements, WARN notices, jobless claims, and earnings call mentions into a single layoff tracker. This indicator rose in October and now sits above pre-pandemic levels.
A quantile regression analysis incorporating the layoff tracker, net employment growth trends, and labor market slack suggests worsening conditions, with a 20-25% probability of unemployment rising by 0.5 percentage points or more in the next six months (up from 10% six months ago).
**Small Business Sentiment Dips to Six-Month Low** Amid deteriorating profitability and fading economic optimism, the U.S. small business confidence index fell to a six-month low in October. Data from the National Federation of Independent Business showed its optimism index dropping 0.6 points to 98.2, with five of its ten components declining.
The net share of business owners reporting profit growth over the past three months plunged by 9 percentage points—the steepest decline since the pandemic—due to weak sales and rising material costs.
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