Marina Lyubimova
⬤ New labor statistics reveal a concerning trend in the US job market, with permanent job losses climbing to 2.0 million in September. This represents the highest level recorded in four years and signals potential trouble brewing beneath relatively stable headline employment numbers. The data shows workers are increasingly facing permanent layoffs rather than temporary furloughs, a pattern that historically appears before broader economic slowdowns.
⬤ The September figure of 2,023 thousand permanent job losers represents about 1.2 percent of America's total workforce. This puts the metric back at levels last seen during the 2001 recession and approaches the stress points observed around the Great Financial Crisis. After dropping sharply through 2021 and 2022, the trend has reversed course steadily upward, indicating employers are cutting positions they don't plan to refill.
This marks the highest level in four years, highlighting growing stress beneath the surface of headline employment figures.
⬤ What makes this shift particularly notable is the nature of these job losses. Companies appear to be making structural cuts rather than temporary adjustments, suggesting they're bracing for tougher business conditions ahead. When permanent layoffs start climbing like this, it usually means firms see reduced demand coming and are trimming their workforce accordingly. This kind of pattern has preceded weaker hiring and slower economic growth in previous cycles.
⬤ The uptick matters because permanent job losses tend to create ripple effects throughout the economy. Workers who lose jobs permanently typically pull back on spending, which affects business revenues and can trigger additional layoffs. With the current reading now matching levels from past recessions, economists and policymakers will likely pay close attention to whether this trend continues or stabilizes in the coming months.
Marina Lyubimova
