October jobs report to highlight holiday hiring, AI’s impact

However, concerns linger regarding wage growth, which is projected to be 2.9% annually, significantly below the current inflation rate of 3.7%. Wages have failed to keep pace with rising prices since March.

While major technology companies have experienced substantial growth, fueled by investments in artificial intelligence and data centers, this has also contributed to increased consumer prices across various goods.

Recent elections underscored public anxiety about the economy, with 75% of voters expressing dissatisfaction with its condition in an NBC News exit poll. The economy was also identified as the top priority for voters.

Geopolitical tensions, including the ongoing conflicts in Iran and Ukraine, are contributing to elevated energy prices. This situation coincides with a broader slowdown in job creation compared to the robust growth seen in previous years. Through September, 612,000 jobs have been added, a notable increase from 2025 but less than the millions added annually from 2020 to 2024. “The problem is the low rate of turnover,” noted Diane Swonk, chief economist at KPMG.

Despite these challenges, business investment, particularly in the technology sector, may be generating some positive effects. Shruti Mishra of Bank of America anticipates that this investment could boost employment in construction and manufacturing related to data centers and AI equipment. Manufacturing jobs increased by 9,000 in September and are up 72,000 since December 2025, while construction jobs grew by 11,000.

The expansion of AI faces headwinds, including potential regulatory pauses and persistently high interest rates. Stock markets reacted to recent election results with significant losses, with the Nasdaq 100 plummeting 6% on Thursday. Economists at Citi caution that higher interest rates and financial constraints could dampen labor demand, and that productivity gains from AI adoption might also impact hiring decisions.

A potential positive factor is the early strength in seasonal hiring for the holiday season, with Indeed Hiring Lab reporting the best start in several years. While some employers are reducing seasonal hires, they are increasingly opting for part-time, non-seasonal roles, suggesting a degree of optimism. However, factors such as tariffs, automation, and reliance on existing staff are also influencing seasonal hiring practices, according to Andy Challenger of Challenger, Gray & Christmas.