US hiring plans hit 16-year low as labour market stagnates

US layoffs declined in September, but year-to-date hiring plans were the weakest in 16 years, according to a report released Thursday by outplacement firm Challenger, Gray & Christmas.

The data points to a labour market slowdown, with both demand and supply of workers easing due to policy changes and technological shifts.

The report has gained significance as the ongoing US government shutdown has suspended key economic releases, including the September employment report that was scheduled for Friday.

This 15th shutdown since 1981 has already furloughed 750,000 federal workers and delayed the release of weekly jobless claims, August factory orders, and construction data. The trade report is also expected to be postponed.

Challenger, Gray & Christmas said planned job cuts dropped 37% month-on-month to 54,064 in September. Employers have so far this year announced 946,426 job cuts, the highest year-to-date since 2020.

Hiring plans so far this year have totaled 204,939, the lowest year-to-date since 2009 when the economy was just emerging from the Great Recession.LABOR MARKET IS STAGNATING

“Right now, we’re dealing with a stagnating labor market, cost increases and a transformative new technology,” said Andrew Challenger, senior vice president at Challenger, Gray & Christmas. “With rate cuts on the way, we may see some stabilizing in the fourth quarter, but other factors could keep employers planning layoffs or holding off hiring.”

The Federal Reserve resumed easing policy last month, cutting its benchmark overnight interest rate by 25 basis points to the 4.00%-4.25% range, to aid the labor market.

Economists say lingering uncertainty from President Donald Trump’s trade policy, immigration raids and the rise of artificial intelligence, have combined to reduce demand and labor supply. Nonfarm payroll gains averaged only 29,000 jobs per month in the three months to August compared to 82,000 during the same period last year.

Challenger said the government accounted for the bulk of planned layoffs, with 299,755 job cuts announced so far this year, part of an unprecedented campaign by the White House to reduce the federal workforce. Trump threatened to fire more federal workers if there was a shutdown.

The surge in AI is costing jobs in the technology sector, with companies in the industry announcing 107,878 layoffs so far this year. Challenger said AI was also making it difficult to land positions, particularly for entry-level engineers.

Should the shutdown persist into next week, September’s consumer price, retail sales, housing starts and producer inflation reports will probably not be published, impacting decision making by households, investors and policymakers.

With inputs from agencies