Two Labor Markets: Jobs Data vs. Real Wages After the Midterms

Sponsor content

Talroo brings clarity to improve new-hire retention

You filled the seat, but not with someone who plans to stay. The candidate made it through your entire interview process while quietly interviewing with other companies that pay 25% more.

When expectations aren't clear up front, retention suffers.

Get clarity up front with Talroo's SmartQualify.

Get a demo today

What a week it has been in America. After a sleepless Tuesday night into Wednesday morning, we know that Democrats will hold at least 54 Senate seats in January and a House majority projected above 250, with Alaska and Mississippi still counting. Twenty-eight governorships are Democratic. Five states (Pennsylvania, Wisconsin, Michigan, Minnesota, Nevada) now have full Democratic control of government.

The AFL-CIO counted a record 639 union members elected on Tuesday and called the result a union-made wave. The federation’s read of the mandate was direct: raise wages, lower costs, expand access to healthcare and unions, and put a check the administration. (Common Dreams)

Three days after the midterms, the Bureau of Labor Statistics put out the October jobs report. Payrolls rose 165,000 and unemployment dipped to 4.1%. It will read like every report this year has read: unemployment in a tight band, layoffs low, nothing on fire.

And on Tuesday, voters looked at that same economy and threw out the people running it.

The Abstract: The Macro

Here is the economy the Fed sees.

Sources: Bureau of Labor Statistics (Employment Situation), Bureau of Labor Statistics (JOLTS), Associated Press (claims).

Quits rose to 3.4 million. Fed Chair Warsh told reporters on October 28 that employment conditions were quite positive, and the conversation on Wall Street this week has been about whether the next move is a hike, not a cut.

The Reality: Lived Experience

Here is the economy voters live in.

Source: Bureau of Labor Statistics (Real Earnings).

Real average hourly earnings is the only earnings number that matters to a household.

• ▪  Payroll growth from January 2025 through September 2026 averaged about 35,000 a month, with seven losing months. (CNBC, from BLS data)
• ▪  1.9 million people have been unemployed 27 weeks or longer, 27% of everyone unemployed, up roughly half a million since the start of 2025.
• ▪  The average duration of unemployment is almost 25 weeks.

So: if you had a job in 2026, you kept it, and your paycheck was worth less every month versus your costs. If you lost one, you stayed out for half a year. Both of those people voted. Neither of them was reading the job openings number.

The Job Board Number

This is the part for everyone who runs a board or buys traffic for one.

The hires rate in September was 3.4%. In 2019 it never dropped below 3.8% in a single month. Through 2026 it has bounced between 3.1% and 3.5%, levels seen in 2013 and 2014. (Bureau of Labor Statistics, JOLTS)

Compare that next to 7.5 million openings. Employers are posting at the highest rate since spring and hiring at the slowest rate in over a decade. Posting is not hiring.

The One Place Workers Are Moving

The quits number is where this gets interesting for boards.

Of the 321,000 additional quits in September, 197,000 came from one sector: accommodation and food services. Its quits rate jumped from 3.6% to 5.0% in one month. Hires in that sector rose 158,000. (Bureau of Labor Statistics, JOLTS)

Hourly workers in the sector with the thinnest margin between pay and rent are the ones walking. They are not quitting because the labor market is strong. They are quitting because the job they have stopped covering the bills, and the next one across the street pays fifty cents more. That is not confidence. That is simple math.

For hourly boards, that is the audience in motion right now.

The Full Accounting

• ▪  Voters: told the economy was fine by every abstract number, and paid less for it every month. They believed reality.
• ▪  Employers: 7.5 million open reqs and the slowest hiring in a decade. The abstract is winning the argument in the boardroom, and the reqs are sitting.
• ▪  Hourly workers: the only group moving, because standing still means falling behind.
• ▪  Job boards: posting volume that looks like demand and conversion that proves it is not.

ICYMI: Two Webinars From last Month

Until Next Time,

Julie “The Doc” Sowash

Got a tip, a press release that deserves a closer read, or a correction? Send it my way. The tip line is always open.