Layoff warnings surged sharply in October across large sections of the United States, according to new data compiled by the Federal Reserve Bank of Cleveland.
The rise in notices suggests growing pressure in parts of the labor market, even as headline job numbers remain resilient.
WARN Notices Spike to One of the Highest Levels in Nearly Two Decades
According to the Federal Reserve’s analysis, more than 39,000 workers in 21 states received WARN Act layoff notices in October — one of the highest monthly totals seen since the Cleveland Fed began tracking these reports in 2006.
The Worker Adjustment and Retraining Notification Act (WARN Act) requires employers to notify workers at least 60 days before large-scale layoffs. Because of that, WARN data is often viewed as an early predictor of labor-market weakness.
Not as Severe as 2020, but Still Elevated
While the October surge is notable, it remains well below the extreme levels recorded during the pandemic shock in March 2020, when more than half a million WARN notices were issued in a single month.
Still, economists say the recent increase stands out against the backdrop of an otherwise steady employment environment.
Industries Showing the Most Stress
The October jump was broad, affecting a range of industries including:
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Manufacturing
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Technology
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Retail and e-commerce
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Transportation and warehousing
Several states saw their highest monthly WARN activity in years, signaling shifting economic conditions as companies navigate higher borrowing costs and slowing consumer demand.
A Mixed Labor Market Picture
Despite the rise in layoff notices, national unemployment remains historically low, and job openings — while declining — are still elevated compared to pre-pandemic levels. This divergence suggests that the labor market is cooling unevenly, with some sectors pulling back faster than others.
Economists note that the increase in WARN notices could reflect a delayed reaction to months of monetary tightening and weaker revenue forecasts heading into 2026.
What the Surge Means Going Forward
The rise in layoff warnings could foreshadow slower hiring and additional job cuts in early 2026 if economic momentum continues to soften.
However, analysts caution that one month of elevated WARN data is not a definitive indicator of a recession.
Businesses are increasingly cautious, trimming staff or restructuring to adjust to tighter financial conditions.
The Federal Reserve will likely factor the October data into its assessment of labor-market cooling as it gauges future interest-rate decisions.
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