New U.S. jobless claims fell to 189,000 in the week ended Oct. 31, matching a mid-July low. Continuing claims rose in the prior week, underscoring how little the low pace of new filings reveals about hiring. The two numbers together describe the labour market that economists have been describing for months: a market in which almost no one is being laid off, and almost no one is being hired either. It is a strange combination, and it is the reason the October jobs report, due on Friday, is being watched so closely.
Why it matters
The low level of new claims is, on its face, good news. Claims near 189,000 are close to the lowest levels since 1969, and they have stayed below 200,000 for seven straight weeks. A labour market that is genuinely cracking produces layoffs, and this one produces almost none. But the continuing claims tell a different story. When continuing claims rise, it means that the people who do lose their jobs are taking longer to find new ones, and that the hiring side of the market is weaker than the firing side suggests. The two measures together are the clearest picture of a low hire, low fire market.
The wider data support that reading. Private payrolls processor ADP reported that private employers added 86,000 jobs in October, above the 69,000 economists had expected, but the headline gain is modest by the standards of the current expansion. Job openings rose by 333,000 to 7.523 million in September, while layoffs fell to 1.641 million, the lowest since March 2025. The economy grew at a 3.4 percent annualised pace in the third quarter, up from 2.2 percent in the second, while September produced only 29,000 net new jobs. Growth without hiring is the puzzle of the moment.
What happens next
The explanation that economists keep returning to is productivity. Output per hour worked has grown at a 2.5 percent annualised pace since early 2023, versus 1.5 percent from 2005 to 2022, the fastest sustained run in decades. If firms can produce more with the workers they already have, they do not need to hire, and the labour market can look soft even while the economy grows. That dynamic also explains why a weak jobs report does not hand the Federal Reserve an opening for rate cuts: unemployment at 4.2 percent and record low claims say the market is not slack, and a strong report keeps the hike risk alive.
What happens next will be decided by Friday report, and by the revisions that follow it. Economists expect about 65,000 new jobs in October, with unemployment holding at 4.2 percent, but the forecasts range from 35,000 to 125,000, and large revisions have been common since the pandemic. The variable worth watching is not the payroll count alone. It is whether the low hire, low fire pattern flips into actual firing: whether jobless claims break above their recent range toward 230,000, and whether unemployment rises from 4.2 percent. Until that happens, the labour market is losing momentum, but it is not breaking.
