The United States added 165,000 jobs in October, far more than economists expected, and the unemployment rate fell to 4.1 per cent, according to the Bureau of Labor Statistics report released on Friday at 8.30am Eastern Time.
The payrolls figure was more than two and a half times the 65,000 expected in a Reuters survey of economists, and well above the 59,000 forecast in a Dow Jones survey. Unemployment dipped from 4.2 per cent in September, back to the level it held through most of mid-2026. Average hourly earnings rose 14 cents to $38.00, up 0.4 per cent on the month and 3.1 per cent over the year.
Revisions rewrite the summer picture
The report also sharply improved the picture of the previous two months. August payrolls were revised up to 186,000 from 133,000, and September’s figure was revised to 60,000 from 29,000 — a combined upward revision of 84,000 jobs. The October gain was also larger than the average monthly increase of 48,000 over the preceding 12 months, according to the BLS.
Professional and business services, health care, and transportation and warehousing added employment in October, the BLS said. But the report was not uniformly strong: the number of people working part time for economic reasons rose by 339,000 to 4.8 million, the labour force participation rate was little changed at 61.9 per cent, and the broader underemployment rate rose to 7.9 per cent from 7.6 per cent.
A December rate rise now looks more likely
The strong headline immediately shifted market expectations for the Federal Reserve. Traders raised the odds of a rate rise at the Fed’s December 8–9 meeting to about 80 per cent, from roughly 70 per cent before the release, according to market pricing cited in the day’s coverage. The 10-year Treasury yield climbed towards 4.88 per cent after the numbers landed.
That creates a tension for investors. The jobs report helped Wall Street recover some of Thursday’s historic rout on Friday, with the Nasdaq rising 1.09 per cent. But a labour market this strong makes it harder for the Fed to cut rates, and the next test comes quickly: the October consumer price report is due on Tuesday, November 10. If inflation also comes in hot, a December hike — the Fed’s first in this cycle — would look more likely still.
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