October 2026 Market Trends Report

Hiring activity revived last month after September’s downturn. The Bureau of Labor Statistics (BLS) reported that employers added 165,000 jobs, surpassing economists predictions by more than two fold.

Job growth significantly exceeded expectations, unemployment declined, and the BLS revised September and August numbers up by a collective 84,000 jobs: all favorable signs for a market revving up.

The composition of job growth is also showing signs of improvement. After two years of gains largely concentrated in healthcare, October brought a broader-based hiring picture with employment increasing across most sectors, including manufacturing, architectural, engineering and professional services. Healthcare and social assistance still led the way, accounting for 55,100 of the jobs added.

However, the broader economic picture is more complex than one positive jobs report might suggest. Employers remain cautious about staffing needs amid economic uncertainty, rising energy costs and the growing integration of AI into business operations.

Looking ahead to future months, a stronger indicator of sustained market resilience will be not just continued job growth, but a broader distribution of that expansion across industries that have largely remained stagnant for the past two years.

Jobs Market Overview: October 2026

4.1%

Overall unemployment rate

The unemployment rate decreased slightly from 4.2% last month, remaining relatively low by historical standards.

+165k

Jobs added

Job growth exceeded expectations by two fold, with growth expanding across more goods-producing sectors.

61.9%

Labor force participation rate (LFPR)

Labor force participation edged up, offering a welcome sign of renewed engagement in the workforce.

Source: Bureau of Labor Statistics' Employment Situation Summary

Industry Employment Trends

OVERALL ECONOMY
+165k

Monthly job change

(+885k year over year)

Industry	Monthly Job Change	YOY Difference
Manufacturing	+19k	+78k
Automotive	+4.1k	+9.9k
Warehousing & Storage	-300	-700
Architectural & Engineering	+4.9k	+50.2k
Construction	-3k	+124k

Source: Bureau of Labor Statistics' Economic News Release

Construction Spotlight

"The construction labor market’s center of gravity currently resides among the industry's largest projects. Data centers, semiconductor plants and large manufacturing facilities are absorbing a growing share of the workforce, enticing skilled tradespeople with higher pay, generous per diem allowances, travel reimbursements and the promise of steady overtime.

For contractors outside these high-growth sectors, competition is getting tougher. The choice isn't simply whether to chase the boom, but whether to pursue larger opportunities through strategic partnerships or strengthen their position in the markets they already know. Either way, employee compensation will matter as mega projects cast a wider net for talent, drawing workers from across the country.

Additionally, each company must develop a unique workforce strategy tailored to their business, project mix and geographic footprint. Contractors will need to account for local labor conditions, particularly in markets where large-scale developments are already putting pressure on the supply of qualified workers."

Joshua Miles

Business Development Manager and Divisional Lead — Construction Support

Sector-by-Sector News: October 2026

CONSTRUCTION JOBS REPORT

Construction jobs added (month over month): -3,000

Construction jobs added (year over year): +109,000

Despite strength in major infrastructure and data center projects, construction employment declined by 3,000 jobs in October, wholly driven by residential building employers, which accounted for a loss of 16,000 jobs.

At the same time, 198,000 construction workers quit in September, a 56% increase from last year, according to data from the latest BLS JOLTS report. This will exacerbate worker shortages and intensify the competition for talent.

At the project level, the very sectors fueling construction's momentum could face headwinds of their own. If tighter regulations slow AI and data center development, the pipeline of major projects, and the demand for workers behind them, could quickly shift.

For contractors, the challenge is to capitalize on today's opportunities without mistaking a concentrated surge in demand for a rising tide across the entire industry.

Additionally, building a workforce around today's construction boom comes with risks. Hiring strategies will need to reflect each company's core business, project pipeline and geographic footprint, particularly in markets where large developments are already straining the supply of qualified workers.

MANUFACTURING JOBS REPORT

Month-over-month jobs change: +19,000

Year-over-year jobs change: +78,000

September Manufacturing PMI: 55.5%*

*A PMI reading above 50% suggests economic activity is expanding

Over the past three months, manufacturing has become the strongest jobs-producing industry after private education and health services (combined) and professional and business services.

As with construction, AI, data centers, semiconductors and critical infrastructure are creating pockets of explosive demand, pushing some manufacturers and suppliers to their limits. The surge is bringing material shortages, lengthening lead times, higher prices and strained global supply chains.

Respondents to the Institute for Supply Management’s Manufacturing PMI survey report that delivery timelines have stretched from weeks to nearly a year, leaving suppliers scrambling to keep pace with customers.

Elsewhere, the picture is considerably less encouraging. Equipment buyers are delaying purchases, traditional year-end spending is failing to materialize, and softer freight activity is sending mixed signals across transportation. Even companies reporting stable sales or strong demand are looking ahead with caution as tariffs, inflation and geopolitical tensions complicate planning.

The result is an uneven manufacturing economy: growth in some corners, gridlock in others, and little certainty about what comes next.

SUPPLY CHAIN & LOGISTICS JOBS REPORT

Warehousing & Storage jobs added (month over month): -300

Warehousing & Storage jobs added (year over year): -700

September Logistics Managers’ Index: 70.7*

*A reading above 50 indicates expanding logistics.

Hiring in warehousing and storage remained flat in September, but the broader transportation and warehousing sector added 24,800 jobs. Meanwhile, the Logistics Managers’ Index (LMI) remained firmly in expansion territory, holding strong at 70.7.

Looking ahead, LMI respondents expect business activity to remain on an upward trajectory. Inventory levels are climbing, while limited warehousing capacity and rising costs are putting additional pressure on the supply chain. In response, major players like Amazon are doubling down on infrastructure, with plans to spend an estimated $220 billion on capital expenditures this year. The takeaway? The race to build capacity is heating up as companies position themselves for continued growth.

For now, respondents expect storage and transportation costs to remain stubbornly high as they anticipate a lucrative holiday season. Despite months of cautious spending and uncertainty, companies appear to be shifting gears as the holiday season approaches.

The LMI describes the renewed push to stock up: “After a year of playing things very cautiously due to doubts about the consumer and the high costs of tariffs and transportation, firms are now pulling inventories in as quickly as they can – often at high costs – in an effort to capitalize on what they hope will be a blockbuster holiday season.”

The gamble? Pay more now, move faster and hope holiday demand delivers the payoff.

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