October Jobs Report Preview: Employees Concerned about Slowing Labor Market

This Friday, the Bureau of Labor Statistics (BLS) will release the October jobs report. Last month, the job market slowed gracefully, dropping job gains to a still-strong 263,000 and pushing unemployment back down to 3.5 percent amid slowing wage gains. As the Federal Reserve aims for a soft landing, the job market is likely to do its part in October, with another month of a slowing but healthy labor market.

Here are three trends we'll be watching for in the October jobs report:

What Are Employees Concerned About?

While the labor market continues to be a strong point for the economy, employees are growing increasingly worried about the health of the labor market. On Fishbowl by Glassdoor, a social network for professionals, concerns about inflation are beginning to fade while concerns about a weaker labor market resulting in layoffs and hiring freezes are on the rise.

Employee concerns about a potential recession are increasingly manifesting in comments and posts about the slowing labor market. Discussions of layoffs surged 34 percent month-over-month in October, rising to their highest levels since September 2020. Similarly, while discussions of hiring freezes are less common, they also rose 27 percent month-over-month in October, hitting their highest levels since April 2020. 

Inflation concerns in the last year have largely followed the rise and fall in gas prices. As gas prices spiked in the early summer, conversations about inflation surged 4.7 times above their pre-pandemic levels. But as gas prices began to fall, the share of Fishbowl posts and comments talking about inflation also declined, increasing only modestly in October (+13 percent) as gas prices again picked up. While conversations about inflation and the cost of living are still elevated, they’re now down 36 percent from the June 2022 peak.

Overall, employee concerns about a recession are lower than they were earlier in the year, but Fishbowl comments and posts mentioning “recession” did increase 53 percent month-over-month in October. While the improving inflation picture may have driven the drop in recession discussions in the late summer, the currently slowing labor market seems to have driven a new round of angst among employees.

Conclusion

The labor market is clearly slowing, but for the moment it is still tight by historical standards. Unemployment remains low, job gains are above pre-pandemic averages and wage growth continues to hover over 5 percent—likely hotter than the Fed would prefer. Eventually, the combination of increasingly restrictive monetary policy and the slowing global economy will catch up with the labor market. But it likely didn’t happen yet in October. And, while the soft landing that policymakers are hoping for is not out of the question yet, it is becoming more difficult as we get closer to the ground.

Methodology

To analyze employee discussion topics, we used comments and posts from U.S.-based users on Fishbowl by Glassdoor, a social network for professionals. We counted the prevalence of keywords including “layoff”, “recession”, “inflation” and “hiring freeze” and their related terms. For example, for “layoff”, we also counted “laid off” or “fired”.