The Big Picture

Economists, policymakers, and job seekers alike are searching for any sign of movement under the surface of a labor market that remains stubbornly set in a low-hire, low-fire stance. The Indeed Job Postings Index (JPI) is trending higher in October, but it would be premature to say the labor market is strengthening. New postings (job postings on Indeed for 7 days or fewer) have yet to improve, and September’s jobs report showed a disappointing gain of just 29,000 jobs while the unemployment rate edged up to 4.2%.   

Job Postings

Where we are: Indeed’s JPI hit 103.8 on October 16, pushing overall job postings almost 4% above their February 2020, prepandemic level. New postings have continued to drift sideways, settling at 99.2. While new job postings are inherently volatile, the marginally downward trajectory persists even after smoothing the data.

Direction of travel: Last month, we noted that the year-over-year change in Indeed postings had finally crossed into positive territory. Sustained momentum in recent weeks has now pushed the JPI 2.8% higher than a year ago. We expect this annual growth to remain positive throughout the fall, buoyed by favorable base effects from subdued JPI levels in late 2025 and a rosier seasonal hiring picture compared to recent years.

Line chart titled “Job postings have been trending up recently,” showing the indexed level of US job postings (100 = February 1, 2020) through October 16, 2026. The index starts at 100, drops sharply to about 73 in early 2020, then climbs steadily to a peak near 162 in late 2021/early 2022. It declines gradually from there to around 100 by 2024, dips slightly below that level in 2025, then rises again to end at 103.8. Source: Indeed.

Sector split: Overall, the breadth of hiring is improving, with 68% of occupational sectors having higher postings than a year ago, up from less than half (49%) at the beginning of September. Engineering occupations are proving to be a particular area of strength. Mechanical, civil, and electrical engineering account for three of the top five sectors by JPI, outshone only by demand for physicians & surgeons and therapy roles. 

Line chart titled “Engineering job postings are ramping up,” showing the indexed level of US job postings by sector (100 = February 1, 2020) through October 16, 2026, for Engineering, Healthcare, Human Resources, Production & Manufacturing, and Software Development. All five sectors fall sharply in 2020, then climb through 2021–2022, with Human Resources and Software Development peaking highest (around 240 and 235) before falling off steeply; Software Development and Human Resources both drop well below the 100 baseline by 2024. Engineering, Healthcare, and Production & Manufacturing peak lower (around 175–200) but decline more gradually, staying above 100 throughout. By late 2026, Engineering has climbed back to the highest level of the group at around 145, followed by Healthcare, Production & Manufacturing, Human Resources near 100, and Software Development lowest at around 78. Source: Indeed.

Regional: Labor demand can vary considerably from market to market, and local conditions often exceed or fall short of national averages by wide margins. Our Labor Tightness Index ranks the ease of job-finding in roughly 800 metropolitan and micropolitan areas relative to the national average, and shows that, in general, some of the slackest areas (i.e., the toughest to find work) are in California and the Southeast. Overall demand in several California and Washington metros, in particular — all large tech hubs and home to millions of tech workers — has suffered from the pull-back in tech-related hiring, with local JPIs in Seattle (67), San Francisco (72), and Santa Rosa (73) all among the lowest in the nation. The Southeast markets’ labor slack is generally due to a mismatch between available jobs and available workers rather than lagging demand. 

Meanwhile, the tightest areas in September 2026 sat in New England and the Upper Midwest. The Lebanon-Claremont micropolitan area straddling New Hampshire and Vermont topped the list of geographies with the tightest labor market, followed by the Burlington, Vermont, metro area. Residents in these corners of the country tend to be among the nation’s oldest, and a wave of retirements and a thin supply of local workers are pushing up demand in these areas.

Wages

Headline: Posted wages grew 2.4% year-over-year in September 2026, cooling slightly after a string of stronger summer readings. Workers are feeling the pinch from higher prices, and inflation-adjusted average weekly earnings fell 0.5% from August to September, bringing take-home pay 0.1% lower this September compared to the same month last year. The squeeze is not affecting all workers equally, and certain sectors, notably electrical engineering (+5.6% on the year) and IT systems & solutions (+4.7%), are seeing robust gains in advertised wages.

Line chart titled “Gap between inflation and wage growth widens,” showing year-over-year growth for the Indeed Wage Tracker and CPI inflation from 2019 through September 2026. Wage growth dips briefly in 2020, then rises sharply to a peak near 9% in 2022, running ahead of inflation, which peaks slightly later near 9% in late 2022. Both measures decline through 2023, converging and crossing a few times near 2.5%–3.5% through 2024–2025, before inflation climbs again to end at 3.7% while wage growth ends lower at 2.4%, widening the gap. Source: Indeed Wage Tracker and Consumer Price Index, January 2019–September 2026.

The Labor Market Balance

Unemployment: The unemployment rate ticked up to 4.2% in September, but the increase from August was mostly a matter of rounding rather than a deterioration. Further, the increase in unemployment was driven by people re-joining the labor force, which is considered a “good” reason for joblessness to rise (at least compared to workers losing their jobs). Overall, unemployment remains historically low and within monetary policymakers’ estimates of full employment.  

Hires, quits, and layoffs: Monthly nonfarm payrolls have historically been the most watched indicator of labor market health, but in an environment of low population growth and structural change, indicators of dynamism have renewed importance. August’s hires rate (3.3%) and quits rate (1.9%) do not inspire confidence that the vitality needed to meaningfully improve the overall employment picture will materialize any time soon. 

Line chart titled “At 4.2%, the unemployment rate remains low,” showing the US civilian seasonally adjusted unemployment rate from 1990 through September 2026, with a note that the y-axis is truncated and the rate peaked at 14.8% in April 2020. The rate starts around 5.3%, rises to about 7.8% in the early 1990s, falls to near 4% by the late 1990s, rises again to about 6.3% in 2003, falls to roughly 4.4% by 2007, then surges to about 10% during the 2008–2010 recession before declining steadily to around 3.5% by 2019. A sharp spike in 2020 is cut off by the truncated axis, after which the rate falls back to about 3.5% and climbs gradually to end at 4.2%. Source: US Bureau of Labor Statistics, seasonally adjusted.

What We’re Watching

Data center job boom: We wrote in July about a rising trend of job postings related to data centers (as well as what it means for workers). At the time, it looked like data center posts were hitting a plateau of sorts after a major surge over the past year. But more recent data through the end of September show this was certainly not the case. Data center-related job postings have grown another 20% in just three months and are now 147% above the levels observed in June 2024.  

Line chart titled “Data center postings have surged past total and the rest of tech,” showing the indexed level of US job postings (100 = June 2024) through September 2026, for All Postings, Data Center Postings, and Tech Postings excluding data centers. All three lines start near 100. Data Center Postings climbs slowly through 2024, then accelerates sharply from mid-2025 onward, ending at 247. Tech Postings (excl. data center) stays close to the 100 baseline throughout, ending at 99, while All Postings drifts slightly lower, ending at 91. Source: Indeed.

Inflation and monetary policy: A labor market that is stable (if not fully “healthy”) gives the Fed flexibility to focus on bringing inflation down to their 2% target. September’s inflation readings were problematic, with energy price increases pushing monthly headline inflation to 0.6%. More concerning was a broadening of price pressures beyond energy: Core goods inflation (which looks at the price of commodities excluding volatile food and energy categories) rose at its fastest monthly pace since January 2025. The FOMC next meets to set monetary policy on October 28, with markets currently expecting no change in interest rates, only about a 15% probability of a 25-basis-point rate hike priced in.

Bar chart titled “Core goods inflation accelerates as price pressures broaden,” showing the month-over-month percent change in commodities less food and energy commodities from around January 2024 through September 2026. Bars are mostly negative through much of 2024, including two sharp drops near -0.3%, turn mixed with several positive readings through early-to-mid 2025 peaking near 0.25%, dip negative again briefly in mid-2026, then rise to end at 0.3% in September 2026. Source: US Bureau of Labor Statistics, seasonally adjusted.

The full chartbook with additional sector, wage, and JOLTS detail is available here.

Methodology

Data on seasonally adjusted Indeed job postings are an index of the number of job postings on a given day, using a seven-day trailing average. February 1, 2020, is our pre-pandemic baseline, so the index is set to 100 on that day. Data for several dates in 2021 and 2022 are missing and were interpolated. 

Data on wage growth are the average year-on-year percentage changes in wages and salaries advertised in job postings on Indeed, controlling for job titles.

Data on AI-related postings are the share of AI (and generative AI) job postings, as a percentage of overall job postings, using a seven-day trailing average. We calculate the aggregate share of job postings in a specific location that included keywords associated specifically with: AI (e.g., “Machine Learning,” “Data Science,” and “Artificial Intelligence”) and Generative AI (e.g., “Generative AI,” “Large Language Models,” and “ChatGPT”).