The U.S. labor market is showing clear signs of cooling, with October likely marking the first monthly job loss since 2020. According to an analysis by Goldman Sachs, nonfarm payrolls are expected to have declined by around 50,000 jobs, ending a nearly four-year streak of continuous employment growth. Economists attribute this drop to weaker labor demand, rising layoffs, and the expiration of a deferred-resignation program in the public sector.
That program had allowed thousands of federal employees to remain on the payroll until the end of September, even after they had resigned. With its expiration, reported employment is expected to fall by roughly 100,000 positions. Beyond this technical effect, Goldman Sachs also points to softness in the private sector, particularly among service providers and retailers who have slowed hiring.
The bank’s job growth tracker dropped from 85,000 new jobs in September to just 50,000 in October, suggesting that the once overheated labor market is now losing momentum after years of post-pandemic expansion.
Although official government employment data have been delayed due to the recent government shutdown, private surveys and high-frequency indicators already point to a continued slowdown. For financial markets, this serves as an important signal: weaker employment could ease inflationary pressures and give the Federal Reserve room to consider interest rate cuts next year.
Overall, October appears to mark a turning point — the U.S. labor market remains fundamentally solid, but its strong momentum is clearly fading.
>>Source: https://www.goldmansachs.com/
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