US companies' layoff plans fell to their lowest level for the same period in four years, while hiring plans simultaneously retreated to 2011 levels — a report released on Thursday further illustrates the "neither firing nor hiring" state of the labor market.

According to data from outplacement and executive coaching firm Challenger, Gray & Christmas, US employers announced 43,281 job cuts last month, a decline of nearly 20% from the same period a year earlier and the lowest reading for any September since 2022.

That figure was down 18% from 52,881 in August on a month-over-month basis.

Taking a longer view, companies announced a cumulative 573,195 job cuts in the first nine months of this year, a decrease of 39% from 946,426 in the same period of 2025 — excluding government positions, the decline was 15%; the third quarter totaled 129,591, down 43% from 226,242 in the second quarter.

The hiring side presents an entirely different picture.

Employers announced plans to hire 90,787 people in September, far above the 12,325 in August, but down 23% from 117,313 in September last year, making it the weakest September since 2011.

By Challenger's measure, hiring plans for the first nine months of this year totaled 210,612, only 3% higher than 204,939 in the same period last year.

"Companies are in a wait-and-see period right now. Employers are facing high energy costs, an uncertain war with Iran, interest rate hikes that could make hiring more expensive, plus healthcare costs that are likely to rise significantly," said Andy Challenger, the firm's chief revenue officer, in a press release.

"Layoff activity has indeed been slowing this year, and the September data continues to illustrate that."

Fewer Layoffs, Even Fewer Hires: A Low-Churn Market

The top reason for layoffs in September was market and economic conditions, accounting for 8,789 positions.

Seasonal hiring should have kicked off in September, but this year's momentum was notably weak: of the 90,787 hiring plans, retail accounted for 65,150 (about 70%), mainly from Halloween pop-up chain Spirit Halloween and craft retailer Michaels, which together announced 62,000 hires this year, below nearly 101,000 last year.

The combination of low layoffs and weak hiring is also reflected in more granular indicators.

According to the US Bureau of Labor Statistics, initial jobless claims fell to 197,000 in the week ending September 19, near multi-decade lows, indicating that companies have not yet launched large-scale layoffs; August's JOLTS job openings decreased by 256,000 to 7.079 million, with 1.01 openings per unemployed person, below 1.06 in July.

In other words, job opportunities are shrinking, but those already employed have not been pushed out en masse — what the labor market has lost is liquidity, not volume.

Consumers feel even worse about this.

According to a survey released Tuesday by the Conference Board, US consumer confidence fell to a near-twelve-and-a-half-year low in September.

"Hiring plans are up year-over-year, but we haven't seen the surge in hiring plans that the holiday season should bring, which shows companies are being very cautious," Challenger said.

Tech Bucks the Trend, AI Becomes the Top Reason for Layoffs This Year

The overall cooling in layoffs has not covered all industries.

In September, the tech sector announced 10,799 job cuts, up 77% from 6,103 in August, making it the sector with the most layoffs that month; food ranked second with 7,326, followed by services with 3,306.

The tech sector has announced a cumulative 165,925 job cuts this year, accounting for 29% of all layoff announcements, higher than any other industry.

More noteworthy is the change in the structure of reasons.

According to Challenger data, from January to August this year, layoffs explicitly attributed by companies to artificial intelligence reached 116,175, about 22% of all layoff announcements in the same period, more than double the 54,836 for all of 2025 and roughly nine times the 12,742 in 2024.

AI-related layoffs peaked in May at 38,579 in a single month, accounting for 40% of that month's total; they then declined month by month, falling to 3,462 in August and dropping to fourth place among reasons, with restructuring returning to the top.

But extending the timeline through September, AI remains the most frequently cited reason for layoffs this year, accounting for about 21% of all planned cuts — which is precisely the conclusion of the report cited in the original article.

The structural aspects of employment data echo this.

According to August nonfarm payroll data, information sector employment fell by 23,000 month-over-month and financial sector employment fell by 11,000; the former has been declining continuously since November 2022 and the latter since May 2025, both attributed by the agency to the impact of AI; meanwhile, goods-producing sectors added jobs for a sixth consecutive month, which may reflect hiring demand from data center construction.

What AI changes is not the total volume of layoffs, but who gets laid off.

Employment Resilience and Sticky Inflation: How Much Room Does the Fed Have Left to Hike?

This report matters because it comes right after the Federal Reserve's September rate hike.

The Fed raised its benchmark rate this month to a range of 3.75% to 4.00%, the first hike in three years, and hinted that borrowing costs could continue to rise in the coming months.

The premise for rate hikes is precisely that the labor market does not deteriorate rapidly.

Confidence on the employment side remains.

According to the US Bureau of Labor Statistics, August nonfarm payrolls added 162,000 jobs, the largest increase in five months and significantly above the market expectation of about 56,000; June and July were revised up by a combined 55,000.

The unemployment rate held at 4.1% for a third consecutive month, the labor force participation rate recovered from 61.4% to 61.6%, and average hourly earnings rose 3.1% year-over-year.

According to a survey of economists, September nonfarm payrolls are expected to add 90,000 jobs (some institutions see 100,000, while Bank of America sees only 60,000), with the unemployment rate expected to remain at 4.1%; ADP data released Wednesday showed the private sector added 90,000 jobs in September, also above expectations.

On the inflation side, signs of easing have emerged in the past two days.

According to data released by the US Bureau of Economic Analysis (BEA) on September 30, the August personal consumption expenditures (PCE) price index rose 3.4% year-over-year, below the market expectation of 3.7%, while July data was simultaneously revised down from 3.7% to 3.4%; core PCE, excluding food and energy, rose 3.0% year-over-year, with July data revised down from 3.3% to 3.0%.

The BEA adjusted its price calculation methods for software and accessories, portfolio management fees, and legal services during the same period, with retroactive revisions back to 2021 — the methodology adjustment alone revised core PCE down by about 36 basis points year-over-year, higher than economists' expectations of 20 to 30 basis points.

Growth data was also revised upward.

According to final revised data, US real GDP grew at an annualized rate of 2.2% in the second quarter, below 2.5% in the first quarter — it should be noted that this 2.2% is the final value after annual revisions, while the second reading on August 26 was 1.5%.

Second-quarter personal consumption expenditures grew 3.8% quarter-over-quarter and non-residential fixed investment grew 9%, with consumption and investment remaining the main drivers; the first estimate of third-quarter GDP will be released on October 29.

After the data was released, market bets on an October rate hike clearly receded.

According to the CME FedWatch tool, the probability of a rate hike at the October 27-28 meeting fell from 51.5% before the data release, and 70% on Monday, to a range of 35% to 40%.

This change partly stems from comments by New York Fed President Williams on Tuesday — he argued that after prior policy tightening, there is "no urgency" for immediate further action.

Fed Officials and Wall Street Signals

But the Fed is not uniformly dovish internally.

Chicago Fed President Goolsbee said inflation running above target for five and a half consecutive years is "playing with fire"; Governor Lisa Cook believes productivity gains will bring moderate inflation cooling, but the effects are not coming fast enough to offset broadening price pressures later this year; Governor Barr said that high energy prices combined with a surge in AI-related investment have put the US "off track" in reaching the 2% inflation target.

Institutional分歧 also centers on the same point.

Sal Guatieri, senior economist at BMO Capital Markets, believes that August's "less scary than feared" price data may give the Fed time to wait for more data and hold steady in October, but with inflation still elevated and consumption and the economy still resilient, one more rate hike before year-end remains possible.

Stephen Stanley, chief US economist at Santander US Capital Markets, cautioned that two months of data are not enough to constitute a trend, especially since the August monthly reading actually reaccelerated, "though there are at least some reasons for slight optimism — at a minimum, the Fed can afford to take its time, and perhaps won't need to hike much to guide inflation toward target."

For investors, Challenger's remark remains the key to understanding this report: companies are not laying off, but they are not hiring either.

This state is friendly to inflation — it suppresses momentum in wage and services price increases; but it also means that once a crack appears on the demand side, the deterioration in employment data could come faster than in the past.

For Friday's nonfarm payroll data, what the market needs to watch is not whether it rises, but how large the gap is.