U.S. Employers Add 165,000 Jobs in October, Well Above the 65,000 Forecast; Unemployment Falls to 4.1%

After a week that brought a Democratic sweep of Congress and a sharp tech sell-off, the first big economic data point is a strong one. U.S. employers added 165,000 jobs in October, the Bureau of Labor Statistics reported at 8:30 a.m. ET today, Nov. 6.

Economists polled by FactSet had projected 65,000. The unemployment rate dipped to 4.1% from 4.2%, while forecasters had expected no change.

Revisions add to the October gain

The prior two months were also revised up. August moved from 133,000 to 186,000. September went from 29,000 to 60,000. Together that is 84,000 more jobs than previously reported.

The breadth of the gain stands out. Professional and business services added 70,000 jobs, well above its previous average monthly gain of 15,000, according to Business Insider's analysis of the BLS data. Health care added 42,000. Transportation and warehousing added 25,000, and manufacturing added 19,000.

Not every sector grew. Construction lost 3,000 jobs, driven by residential building. Accommodation and food services shed 10,600. Federal government employment fell by 1,000.

NBC News reported that the data appear to include some AI-related construction and manufacturing hiring. Nonresidential specialty trade contractors, the electricians and other trades who build data centers and commercial projects, added 7,900 jobs.

Pay still trails prices

Average hourly earnings rose 0.4% in October and 3.1% from a year earlier. Forecasts were 0.3% and 2.9%. The average workweek held at 34.4 hours.

Inflation was 3.7% in the September Consumer Price Index, released Oct. 14. That puts wage growth about 0.6 percentage point behind prices. NPR reports the cost of living has outrun wages for much of this year, since energy prices jumped after the war with Iran began.

"Workers are losing ground right now," said Cory Stahle, an economist at the job-search site Indeed. "The longer it wears on, the more and more they're going to feel that."

That tension was central to the midterms. Voter frustration over prices contributed to Republicans losing their majorities in both the House and Senate, according to NPR and CNBC. Democrats campaigned heavily on affordability.

A mixed picture under the headline

Labor force participation rose to 61.9% from 61.8%, and the employment-population ratio edged up to 59.3% from 59.2%. The broader U-6 measure, which counts discouraged workers and people in part-time jobs for economic reasons, rose 0.3 point to 7.9%. The civilian labor force grew by 421,000.

KPMG chief economist Diane Swonk pointed to a low rate of turnover. "Fewer people are entering the labor force," she said, describing the steady unemployment rate as a kind of stagnation.

Apollo Global Management chief economist Torsten Slok noted that through September 2026, unemployment had stayed below 5% for 61 straight months. He wrote that the streak was "on the verge of becoming the longest period of sustained labor market strength in modern US history."

The weekly data were already pointing this way. Initial jobless claims fell to 189,000 for the week ending Oct. 31, matching a 57-year low set this summer, according to the Labor Department. Challenger, Gray & Christmas counted fewer than 44,000 announced job cuts in October, down 71% from a year earlier. Its tally of planned hiring, about 445,000, was the highest for any October since 2009, driven largely by Amazon's plan to add 300,000 seasonal workers.

The Challenger firm's own commentary cautions that much of the planned hiring is short-term seasonal work. Employers want the flexibility to meet holiday demand "without adding permanent headcount," it said.

Oxford Economics chief global economist Ryan Sweet said earlier this week that all signs point to a solid labor market, "even if it is difficult for pockets of workers."

What it means for the Fed

The Federal Reserve held its benchmark rate steady at its meeting last week. The strong report pushes the other way. CME Group's FedWatch tool put the probability of a quarter-point hike at the Dec. 8-9 meeting at 76.8%, though it pointed to only one more increase after that. Odds of further hikes in 2027 had slipped in recent days after the election and Thursday's tech sell-off.

Stock futures were mixed after the release and Treasury yields were higher across the board, CNBC reported.

A hotter labor market makes the Fed's job harder with inflation at 3.7% against a 2% target. Central bankers are weighing whether to resume raising interest rates at the Dec. 8-9 meeting, where policymakers will decide whether to raise rates again.