US adds 165,000 jobs in October as unemployment falls to 4.1%

The US economy added 165,000 nonfarm jobs in October, well above the roughly 59,000–65,000 that economists had expected, the Bureau of Labor Statistics reported on Friday, 6 November.

Labour market snapshot

• The unemployment rate fell to 4.1% from 4.2% in September.
• Average hourly earnings rose 0.4% on the month and 3.1% over the year, above forecasts of 0.3% and 2.9%.
• August payrolls were revised up to 186,000 (+53,000) and September to 60,000 (+31,000).
• The labour force grew by 421,000; the participation rate edged up to 61.9%. A broader underemployment measure (U-6) rose to 7.9%.

Where the jobs were

Professional and business services led with 70,000 new jobs, followed by health care (42,000), transportation and warehousing (25,000) and manufacturing (19,000), according to CNBC. Gains were broader than the recent pattern in which health care alone drove most hiring.

What it means for the Fed

Markets raised the odds of a December rate hike after the report, CNBC said, citing CME FedWatch. Officials are weighing whether to tighten again as inflation remains above the 2% target amid higher energy costs linked to the Middle East conflict. Seema Shah of Principal Asset Management called the data “a strong rebuttal to fears that the economy is heading into a meaningful slowdown.”