The US jobless rate likely edged up in October to the highest in four years as the hiring rate for unemployed workers slowed and the rate of layoffs and other job separations increased, according to an estimate by the Chicago Fed released Thursday.
The regional Fed bank estimated the unemployment rate climbed to 4.36% last month - 4.4% on the rounded basis typically reported by the Bureau of Labor Statistics - from 4.35% in September.
The bank has been providing twice-monthly estimates of the jobless rate since shortly before a now-record-long federal government shutdown cut off the flow of published reports on the economy from the BLS, Bureau of Economic Analysis and Census Bureau.
The last US jobless figure published by the BLS, for August, put the rate at 4.3% - the highest since October 2021 when it was 4.5%.
“The October 2025 reference week (October 12th through October 18th) for the BLS survey used to estimate the unemployment rate overlapped with the federal government shutdown that began in early October,” the Chicago Fed said.
“This special factor is likely to be only partially reflected in the October 2025 Final release of the Chicago Fed Labor Market Indicators,” it added.
The Chicago Fed also noted that, “The Congressional Budget Office expects that as many as 750,000 federal government workers have been furloughed during the government shutdown, representing up to 0.4 percent of the civilian labor force (as of August 2025 data).”
In a related development, a report by Challenger, Gray & Christmas said on Thursday that US-based employers cut more than 150,000 jobs in October, marking the biggest reduction for the month in more than 20 years, as industries adopt AI-driven changes and intensify cost cuts.
Tech firms led the job cuts in the private sector, followed by retailers and the services sector, the global outplacement company said.
Cost-cutting was the top reason for the layoffs in October, followed by artificial intelligence, while “DOGE Impact” was the leading reason for job cuts in 2025, according to Reuters.
The layoffs in October surged 175% from a year ago to 153,074. From the start of the year to October end, employers have announced 1,099,500 job cuts, a 65% rise from 664,839 in the same time period last year.
So far this year, job cuts are at the highest level since 2020 when 2,304,755 cuts were announced through October.
Not only did individual companies announce large layoffs in October, but a higher number of companies announced job cut plans, Challenger said, tracking nearly 450 individual job cut plans in October compared to under 400 in September.
