RSM Forecasts 95,000 October Jobs Gain, Near Triple Break-Even

RSM's forecast for the October U.S. jobs report points to a net gain of 95,000 jobs — nearly three times the roughly 35,000 needed to keep employment conditions stable. That's the headline number practitioners should anchor on as the data lands.

The case for a solid print rests on two legs. First, jobless claims have shown remarkable stability while the economy grew 3.4% in the third quarter, conditions RSM reads as ripe for rising labor demand. Second, the comparison base: October's data will be measured against a year ago, when the government was shut down. That distortion means the monthly figure could well come in above 95,000.

What does the household survey show?

RSM expects the unemployment rate to hold at 4.2% — full employment, in effect, but with soft spots underneath. The median duration of unemployment stands at 11.5 weeks, and the count of people unemployed for 27 weeks or longer is creeping up. That long-term unemployed group now numbers 1.94 million out of a potential labor force of 170 million.

Demographic detail sharpens the picture:

• Men 20 and older: 3.9% unemployment
• Women 20 and older: 3.6%
• All workers 25 and older: 3.3%
• College-degree holders: 2.5%

The education premium is doing real work here. A degree roughly halves your unemployment risk relative to the headline rate.

There are also 4.5 million people who cannot find work for economic reasons, and 22 million who were not working for non-economic reasons through the end of September.

Where will hiring come from?

RSM expects the major October hiring drivers to be healthcare, government, private services, goods production and construction. That mix matters for job seekers: it skews toward services and skilled trades, not white-collar tech.

Indeed, RSM is explicitly monitoring technology and financial activities. Its conjecture: the substitution of technology for labor in those industries is starting to show up in the data, in the form of artificial intelligence. For practitioners in those fields, that's the variable to watch in coming reports.

A strong six months of corporate profits supports the hiring outlook too. Increased demand for labor, RSM argues, tends to follow profit strength in the near term.

What about pay?

Here the story darkens. Both the monthly data and the quarterly Employment Cost Index (the government's broadest measure of labor cost growth) point to slowing wage growth. Over the past year, RSM finds wages have declined 0.7% in real terms — negative for six consecutive months.

RSM does not expect the October data to offer much relief to middle-class, working-class and working-poor households, where stress is slowly building. The one silver lining, in RSM's framing: wage growth is not yet a cause for concern around wage-push inflation. Slack on the pay side keeps the inflation picture quiet even as the quantity side of the labor market stays firm.

What it means for your position

If you hold a degree or work in healthcare, government, private services, goods production or construction, the market's tilt is in your favor — hiring should run well above the 35,000 break-even pace. If you sit in tech or finance, the AI-substitution signal bears watching, and real pay has been eroding for half a year regardless of sector.

Going forward, watch whether the actual October print clears 95,000 on the shutdown-distorted base, and whether the 27-week unemployment count of 1.94 million keeps climbing.