Hiring rebound expected in new US jobs data, though inflation is eroding
the American paycheck
[November 06, 2026] By
PAUL WISEMAN
WASHINGTON (AP) — The U.S. job market likely bounced back last month
from a disappointing September. Layoffs are low, and most Americans
enjoy unusual job security.
But hiring has probably remained too modest to deliver much relief to
those looking for work. And wage gains haven’t been keeping up with
persistently high inflation.
When the Labor Department releases new data on October job creation and
unemployment Friday, they’re expected to show that employers added
65,000 jobs last month and that the unemployment rate remained low at
4.2%, according to a survey of forecasters by the data firm FactSet.
The jobs report comes three days after voters handed a stunning defeat
to President Donald Trump and his Republican Party in midterm elections.
Frustrated with the state of the economy — and especially the high cost
of living – Americans handed full control of the U.S. Congress to the
Democrats.
Yet the American economy and job market have proven resilient in the
face of a series of shocks — Trump’s double-digit taxes on imports and
the war with Iran, which has driven U.S. gasoline prices above $4 a
gallon and pinched family budgets.
Gross domestic product — the nation’s output of goods and services —
advanced at a sprightly 3.4% annual pace from July through September,
lifted by strong consumer spending and booming investment in artificial
intelligence.
The job market has been solid but unspectacular.
So far this year, employers — companies, government agencies and
nonprofits — have added an average of 68,000 jobs a month, including a
disappointing 29,000 last month. That is modest by historic standards
but an improvement over 2025 when monthly job creation averaged 9,700.
That was the weakest performance outside of a recession since 2002. Last
year, high interest rates and President Donald Trump’s unpredictable
trade policies discouraged hiring.
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Workers hold a hose as concrete in poured to form a beam on a
residential building under construction, Tuesday, Oct. 6, 2026, in
Miami. (AP Photo/Marta Lavandier, File)
 Despite recovering this year, hiring
remains well below the average of 166,000 monthly jobs created in
2023 and 2024, let alone the 491,000 a month recorded during the
2021-2022 hiring boom that followed COVID-19 lockdowns.
Economists see a “low-fire, low-hire’’ environment in which
employers are reluctant to let go of existing workers but aren’t in
any hurry to hire new ones. Young people entering the workforce, or
those who’ve lost their jobs, can struggle to find work.
The United States doesn’t need as many new jobs as it once did to
keep the unemployment rate from rising. That is because baby boomer
retirements and Trump’s immigration crackdown mean fewer people are
competing for work.
In late 2023, the so-called break-even point was around 166,000 new
jobs a month. It’s now just over 5,000, according to an estimate by
Yale University’s Budget Lab, which drew on an earlier Federal
Reserve report.
Meanwhile, rising prices have pinched pay for millions of Americans.
After taking inflation into account, average hourly earnings fell
0.7% in September – the sixth straight year-over-year drop and one
explanation for voters’ fury at the polls Tuesday.
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