October Jobs Report: 165,000 Added, Revisions Add 84,000, and Futures Put December Fed Hike Odds at 77%

Since the Bureau of Labor Statistics reported on Friday, Nov. 6, that employers added 165,000 jobs in October, the figures beneath the headline have shown where the hiring came from and what it could mean for interest rates.

The headline number beat every forecast in circulation. Economists polled by Dow Jones expected 59,000 jobs, FactSet's survey had 65,000, and the Wall Street Journal's poll also had 65,000. The unemployment rate fell to 4.1% from 4.2%.

Revisions and the breakdown

The BLS revised August up from 133,000 to 186,000 and September up from 29,000 to 60,000. That added 84,000 jobs to earlier totals.

With those changes, job growth averaged 137,000 a month from August through October, according to Hubbard and O'Brien Economics. It averaged just 28,000 from May through July. Through October, 2026 is running at about 86,000 a month, versus 10,000 a month in 2025 and 122,000 in 2024.

Private employers accounted for 159,000 of October's gain. Government added 6,000. Four sectors made up about 94% of the increase:

• Professional and business services: 70,000
• Health care: 42,000
• Transportation and warehousing: 25,000
• Manufacturing: 19,000

Manufacturing is up 101,000 since December. Leisure and hospitality and wholesale trade lost jobs.

Average hourly earnings rose 0.4% in the month and 3.1% over 12 months, both above forecasts. Labor force participation edged up to 61.9%, the highest since March, and more than 400,000 people entered the labor force.

Consultants and the AI question

The detail drawing the most attention is in consulting. Employment in management, scientific and technical consulting grew by 17,300 between September and October, the largest monthly increase in nearly two years. The category now tops 1.9 million workers for the first time on record. It supplied 25% of the professional and business services gain.

That cuts against the investor assumption that AI would shrink the profession. Gartner's shares have lost more than half their value over three years, while Accenture is down about 18% and FTI Consulting about 9%, even as the S&P 500 climbed roughly 74%.

Some economists tie the jump to companies hiring help to adopt AI. Gartner forecast in September that worldwide AI spending would reach $2.7 trillion in 2026, up nearly 50%. "The AI buildout and corporate interests to increase utilization will keep the technical consultants employed," said Jeffrey Roach, chief economist at LPL Financial. He called the sector "worth watching" and noted similar double-digit growth in the late 1990s, when firms raced to adopt internet technology.

Moody's Analytics has estimated that AI has created a net 786,000 jobs since ChatGPT launched in November 2022, driven partly by data center construction.

One month does not settle the question. CBS News noted that employers are handing at least some roles that historically went to younger workers to AI. The share of unemployed workers out of work 27 weeks or longer rose to 27.6% in October from 27.1% in September.

Reaction

The White House credited the president's agenda. "Today's jobs report, which blew past expectations and added 165,000 jobs, is proof that President Trump's pro-growth economic agenda is working," spokesman Matthew Middleton said, pointing to nearly 20 trade deals and manufacturing investment.

Outside economists were more measured about the cause but largely agreed on the numbers. Seema Shah of Principal Asset Management called the report "a strong rebuttal to fears that the economy is heading into a meaningful slowdown." Dan North of Allianz Trade called it "stronger than expected and the best one in a while," while describing the labor market overall as "stable but perhaps unexciting." Jason Furman, who chaired President Obama's Council of Economic Advisers, said it may be among the best job markets on record for delivering jobs to people who want them.

Bloomberg's Chris Anstey noted that total manufacturing employment is now a net positive since Trump returned to office.

What it means for the Fed

Strong hiring is not welcome news for everyone. Inflation accelerated last month and remains well above the Fed's 2% target. The central bank held rates steady in October.

Olu Sonola, head of U.S. economics at Fitch Ratings, said the labor market's resilience "keeps the Fed focused on inflation and pushes the policy debate further toward a December rate hike." Robust hiring tends to push wages higher, which can feed inflation.

As of Friday, CME FedWatch showed futures traders putting the odds of a hike at roughly 77%. Most economists expect the Fed to raise its benchmark rate at its Dec. 8-9 meeting.

The Fed has no further scheduled meeting before then, so the next signals will come from inflation data and Fed officials' own comments.