U.S. employers added 165,000 jobs in October, nearly three times the 59,000 forecasters had expected, and the unemployment rate slipped to 4.1%, the Bureau of Labor Statistics said Friday.
The earlier picture also brightened. August payrolls were revised up by 53,000 to 186,000, and September's count rose by 31,000 to 60,000.
Unlike recent months, when healthcare supplied most new jobs, October's gains were broad. Professional and business services led with 70,000, followed by healthcare at 42,000, transportation and warehousing at 25,000 and manufacturing at 19,000.
Today's jobs report is a strong rebuttal to fears that the economy is heading into a meaningful slowdown,
Seema Shah, chief global strategist at Principal Asset Management
Paychecks grew faster than predicted. Average hourly earnings climbed 0.4% for the month and 3.1% over the year, beating estimates of 0.3% and 2.9%, while the average workweek held at 34.4 hours.
The labor force, which had been contracting because of demographic shifts and reduced immigration, grew by 421,000. Labor force participation edged up to 61.9%, and the household survey counted 463,000 more people working.
Signs of strain
Not every measure improved. A broader gauge that counts discouraged workers and people stuck in part-time jobs for economic reasons rose 0.3 percentage point to 7.9%. The average stretch of unemployment jumped 2.3 weeks to 27.1 weeks, the longest since September 2021, and 1.96 million people had been jobless for more than 27 weeks, the most since December 2021.
The data lands as Federal Reserve officials consider resuming interest rate increases in December, with inflation still above the central bank's 2% target. Traders raised the odds of a quarter-point hike at the Dec. 8-9 policy meeting to 76.8%, according to CME Group's FedWatch tool, though bets on further hikes in 2027 have eased after the midterm results and Thursday's sell-off in tech stocks.
The report also follows an election dominated by the economy and inflation. Democrats, who campaigned heavily on affordability, swept to control of both chambers of Congress.
Initial market reaction was subdued. Stock futures were mixed ahead of the open, and Treasury yields rose across the board.
