Holiday hiring and AI in focus with October jobs report on deck

A coffee shop employee in Austin, Texas in August. Brandon Bell / GettyShareAdd NBC News to GoogleNov. 5, 2026, 6:00 PM ESTBy Steve KopackA lukewarm job market may have gained some steam last month, as companies began hiring workers for the holiday season, although slowing wage growth and the impact of AI remain big concerns.

The Bureau of Labor Statistics is set to release the October jobs report at 8:30 a.m. ET on Friday. Economists expect the report to show the U.S. added 59,000 roles, up from September’s 29,000, according to a survey conducted by Dow Jones. The unemployment rate is projected to remain unchanged at 4.2%

Workers’ wages, however, are expected to show annual growth of 2.9%, well below the latest rate of inflation. In September, the annual rate of inflation rose to 3.7%. Since March, wages have grown more slowly than the pace of prices.

While publicly traded tech giants have boomed — Thursday’s massive selloff aside — workers are seeing little payoff, all while remaining on edge to see what the technology will do to their jobs.

Those companies, which are pouring hundreds of billions of dollars into developing artificial intelligence and data centers, are also driving up prices across the economy for consumers, from Apple products to Nintendo Switch 2 game consoles to laptop computers.

As voters turned up at ballot boxes around the country on Tuesday, 75% of them told NBC News’ exit poll that the state of the economy was “not so good or poor.” Voters also ranked the economy as their number one issue when casting their ballots. The war with Iran remains a stalemate, which is also driving up energy prices, as is the Ukraine-Russia war.

At the same time, the labor market is sluggish. On a broad basis, job growth this year has significantly lagged the last few years. At a total of 612,000 jobs added through September, it surpasses 2025’s near-zero growth, but pales in comparison to the millions of jobs added each year from 2020 through 2024.

FOR SUBSCRIBERSBird flu didn’t turn into a pandemic, but it never went away, either FOR SUBSCRIBERSMany Republicans leaned into the ‘culture wars’ on the campaign trail. It didn’t work.FOR SUBSCRIBERSA district-level look at the huge shifts across the House battlefieldFOR SUBSCRIBERSAnticipation, optimism take hold as Mississippi’s Senate race becomes a nail-biterFOR SUBSCRIBERS‘Everyone was mad’: How anger helped fuel Latino voter turnout and a historic Democratic shift in TexasFOR SUBSCRIBERSDemocrats’ midterm win threatens to disrupt Trump’s fragile truce with XiFOR SUBSCRIBERSScott Colom criticizes Democrats for writing off Mississippi amid close Senate vote countFOR SUBSCRIBERSAre we approaching a new era of Alzheimer’s prevention?FOR SUBSCRIBERSMaps: How the vote shifted from the 2024 presidential election to 2026FOR SUBSCRIBERSAnger over GOP education agenda fueled blue sweeps in Texas, advocates sayFOR SUBSCRIBERSMicroplastics are altering the color of the ocean, and the changes can be seen from spaceFOR SUBSCRIBERSDemocratic Senate set to thwart Trump’s Supreme Court and judicial appointmentsFOR SUBSCRIBERSHow an unlikely Virginia law could offer a path to justice after a Texas campus sexual assaultFOR SUBSCRIBERSNewly elected Democrats could become 2028 power brokersFOR SUBSCRIBERSEven before election, Trump’s White House was prepping for Democratic investigationsSlide 1 of 1“The problem is the low rate of turnover,” said Diane Swonk, chief economist at KPMG, also noting that “fewer people are entering the labor force.” The unemployment rate has remained historically low for an extended period of time, but workers who want or need to change jobs have few options.

The wars and the AI boom may be supporting some employment creation, however. “Recent [third quarter] GDP data showed extremely strong business investment,” said Bank of America’s Shruti Mishra.

She said that she expects to see some payoff on Friday from the unprecedented tech spending, which could “continue to support employment in construction and manufacturing, both through the data-center buildout and production of AI-related equipment.”

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But, the AI boom is facing rising risks: from Democrats who have pledged data center pauses or bans sweeping Tuesday’s elections, to interest rates that remain highly elevated compared to recent years.

On Thursday, the S&P 500 and Nasdaq Composite suffered their worst one-day selloffs since April 2025, in the wake of the Democratic rout. The Nasdaq 100, which includes heavyweights such as Tesla and Microsoft, plummeted 6%, erasing more than $2 trillion in value.

“Some sectors, like residential construction and parts of manufacturing, may be sensitive to higher rates and tighter financial conditions. If financial conditions continue to tighten, demand for labor may soften more broadly,” Citi economist Veronica Clark wrote earlier this week.

“Of course, there is also the possibility that productivity gains (perceived or real) from AI adoption could weigh on hiring, or also that the cost of adopting AI could mean less funds to hire workers,” Clark added.

One bright spot in Friday’s report could be hiring for the upcoming holiday season. In October, the Indeed Hiring Lab reported that “seasonal hiring is off to its best start in several years.”

“That early strength is one reason to expect the momentum could carry past this year’s holiday shopping season,” the firm said. “A group of large employers is posting far fewer seasonal jobs than they did a year ago, but making up for some of that drop by shifting toward hiring more non-seasonal, part-time roles — a potential sign of optimism heading into the final months of 2026.”

There are other factors at play, too. Andy Challenger, workplace expert at outplacement firm Challenger, Gray and Christmas said “tariffs continue to work through supply chains, and retailers are leaning on automation, existing associates, and on-demand pools before hiring net-new seasonal workers.”

Steve KopackSteve Kopack is a senior reporter at NBC News covering business and the economy.