U.S. layoffs drop nearly 40% in 2026 to four-year low, new data shows
Layoffs in the U.S. have fallen to a four-year low, while employers' hiring plans are up 3% this year, according to new labor data.
Employers have announced 573,195 job cuts through September this year, a nearly 40% decline from the first nine months of 2025, Challenger, Gray & Christmas said on Thursday. On a monthly basis, layoffs dropped 20% in September to 43,281 from a year earlier, the lowest level in four years, the outplacement firm said.
The data suggests the labor market remains solid, even if hiring isn't as strong as it was in the post-pandemic years. The figures come a day before the Labor Department's monthly jobs report, with economists forecasting that employers across the U.S. added 90,000 jobs in September. Employers have added an average of 71,000 new hires over the previous three months.
"The labor market is somewhere between stable and reaccelerating," PNC Economics analysts said in a Sept. 30 research note. "We're seeing early signs that wage growth may be picking up again, which could make it more difficult for the Fed to reduce inflation without raising rates."
In another sign that companies are avoiding layoffs, initial jobless claims for the week of Sept. 26 declined by 1,000 to 197,000, the Labor Department said on Thursday.
"Jobless claims continue to defy expectations and remain exceedingly low, dovetailing with the JOLTS report's layoff rate, which shows that while businesses aren't hiring at a rapid pace, they are reticent to let their current crop of workers go," Oxford Economics said in a Thursday research note, referring to the Job Openings and Labor Turnover Survey data released Tuesday.
The JOLTS report showed that the pace of worker separations, which includes both layoffs and resignations, was unchanged from a month earlier, while hiring rose by 3.3%.
The solid jobs data has given the Federal Reserve an opening to raise interest rates as it seeks to push inflation toward its annual 2% target. Last month, the central bank announced its first rate hike in three years after inflation flared this year due to higher energy costs sparked by the Iran war.
More rate hikes could be in store later in 2026, according to economists. While CME FedWatch predicts the Fed is likely to skip an increase at its October meeting, the gauge shows a 60% probability of a quarter-point interest rate boost at the central bank's December meeting. (The Fed doesn't have a monetary policy meeting in November.)
Hiring plans in 2026
Through the first nine months of the year. U.S. employers have announced plans to hire 210,612 workers, up 3% from the same period a year earlier, according to Challenger Gray.
"Hiring plans are up over the year, but we're not seeing the surge of hiring plans that come with the holiday season, which suggests a very cautious approach," Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas, said in a statement.
Spirit Halloween and Michaels have said they'll add 62,000 seasonal workers in 2026, down from 100,800 last year, Challenger Gray said.
Edited by Alain Sherter
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