US employers added 165,000 jobs in October, far more than economists had expected, and the unemployment rate edged down to 4.1%, the Bureau of Labor Statistics (BLS) reported on Friday. The report, the first monthly jobs release since the midterm elections, suggests the labour market remained resilient even as hiring has slowed from the pace of recent years — and it gives the Federal Reserve more room to focus on inflation.
Economists polled by Reuters had forecast payrolls rising by just 65,000, with estimates ranging from 35,000 to 125,000. The October figure was also more than three times the average monthly gain of 48,000 recorded over the previous 12 months, according to the BLS.
The unemployment rate fell from 4.2% in September. The number of unemployed people, at 7.1 million, changed little over the month, and the rate has remained in a narrow range of 4.1% to 4.3% since March, the BLS said.
Where the jobs came from
Hiring was concentrated in a handful of sectors. Professional and business services led the way, adding 70,000 jobs — well above its average monthly gain of 15,000 over the prior 12 months. Within that sector, professional, scientific and technical services added 33,000 jobs, administrative and support services added 28,000, and management of companies added 9,000.
Health care added 42,000 jobs, also above its recent average of 31,000 a month, with hospitals accounting for 16,000 of the gain, home health care services 11,000 and outpatient care centres 5,000.
Transportation and warehousing added 25,000 jobs, reflecting growth in couriers and messengers (+17,000) and air transportation (+4,000). Manufacturing continued to trend up, adding 19,000 jobs, including 7,000 in computer and electronic product manufacturing.
Employment showed little change in most other major industries, including construction, retail trade, information, financial activities, leisure and hospitality, and government.
| Sector | Jobs added in October | Recent monthly average |
|---|---|---|
| Professional and business services | +70,000 | +15,000 |
| Health care | +42,000 | +31,000 |
| Transportation and warehousing | +25,000 | — |
| Manufacturing | +19,000 | — |
| Total nonfarm payrolls | +165,000 | +48,000 |
Wages and hours
Average hourly earnings for all employees on private nonfarm payrolls rose by 14 cents, or 0.4%, to $38.00 in October. Over the past 12 months, average hourly earnings have increased by 3.1%, the BLS said. The average workweek for all private-sector employees remained at 34.4 hours.
For production and nonsupervisory employees — the roughly four-fifths of the private workforce in non-managerial roles — hourly earnings rose 12 cents to $32.75, and their average workweek edged down 0.1 hour to 33.8 hours.
Revisions paint a stronger summer
The BLS also revised its estimates for the two previous months sharply upward. August's gain was revised up by 53,000, from 133,000 to 186,000, and September's was revised up by 31,000, from 29,000 to 60,000. Combined, August and September added 84,000 more jobs than previously reported.
The revisions matter because the original September figure — just 29,000 jobs — had fed fears that hiring was stalling. The revised picture is of a labour market that slowed through the summer but did not stop.
"The October jobs report beat expectations by a massive margin: adding 165,000 jobs, about 100,000 above the consensus forecast."
— Andrew Flowers, chief economist at Appcast, quoted by IndustryWeek
What it means for the Federal Reserve
The strong report keeps the Federal Reserve on course to raise interest rates in December, according to Reuters, with traders raising their bets on a hike after the data. The odds of a December increase rose to about 73% after the jobs data, according to the CME FedWatch tool cited by Barron's.
The Fed left its benchmark overnight interest rate in the 3.75%–4.00% range last week. Its final policy meeting of the year is on December 8–9. Next Tuesday's consumer inflation report for October could offer more clues on the course of monetary policy in early 2027, Reuters reported.
Reuters also noted that the labour market's resilience gives the Fed more scope to focus on inflation stemming from the Middle East conflict, which has pushed energy prices higher. The report added that job gains are still lagging overall economic growth: gross domestic product increased at a 3.4% annualised rate in the third quarter, fuelled by strong consumer spending and businesses investing aggressively in artificial intelligence.
Context: economists estimate the US economy now needs to create only about 40,000 jobs a month to keep up with growth in the working-age population — down from roughly 150,000 in 2024 — because the labour force has shrunk, partly as a result of the immigration crackdown and retirements, according to Reuters. That lower "breakeven" rate helps explain why unemployment can fall even when hiring looks modest by past standards.
The softer undercurrent
Beneath the headline, the report contained signs that finding work remains difficult for many. The number of people employed part time for economic reasons — those who would prefer full-time work but could not find it or had their hours cut — rose by 339,000 to 4.8 million in October, the BLS said.
The broader U-6 measure of unemployment, which includes people marginally attached to the labour force and those working part time for economic reasons, rose to 7.9% from 7.6%, according to Barron's.
The number of long-term unemployed — those jobless for 27 weeks or more — was little changed at 2.0 million, accounting for 27.6% of all unemployed people. The labour force participation rate held at 61.9%, and the employment-population ratio at 59.3%, both showing little net change since January.
Reuters reported that limited opportunities have made it difficult for young adults, recent college graduates and some unemployed people to find work, and that some economists argue a shrinking supply of workers, rather than strong demand, is the main reason unemployment stays low.
Note on comparisons: year-over-year comparisons for the household survey data are unavailable in this release, because the October 2025 reference period fell during a federal government shutdown. The payroll and earnings figures come from the separate establishment survey of employers and are not affected.
Frequently asked questions
How many jobs did the US add in October?
Nonfarm payroll employment rose by 165,000, according to the Bureau of Labor Statistics — far above the 65,000 economists polled by Reuters had forecast, and more than three times the average monthly gain of 48,000 over the previous 12 months.
What is the US unemployment rate now?
4.1%, down from 4.2% in September. The rate has stayed between 4.1% and 4.3% since March, and has now remained below 5% for 62 consecutive months, according to Barron's.
Which sectors hired the most?
Professional and business services (+70,000), health care (+42,000), transportation and warehousing (+25,000) and manufacturing (+19,000). Employment was little changed in most other major industries.
What does the report mean for interest rates?
Traders increased their bets on a Federal Reserve rate rise in December, with the odds put at about 73% by the CME FedWatch tool after the data. The Fed's next meeting is December 8–9, and October's consumer inflation report, due next Tuesday, will be the next big data point.
Why did earlier months get revised up?
The BLS revises its estimates as additional reports arrive from businesses and government agencies and seasonal factors are recalculated. August was revised up by 53,000 and September by 31,000, adding 84,000 jobs to the summer total.
Key takeaways
- US employers added 165,000 jobs in October — nearly triple the 65,000 economists expected — and unemployment edged down to 4.1%.
- Hiring was led by professional and business services (+70,000) and health care (+42,000); wages rose 0.4% in the month to $38.00 an hour.
- August and September were revised up by a combined 84,000 jobs, softening earlier fears that hiring had stalled.
- The strong report keeps a December Federal Reserve rate rise in play, with traders putting the odds at about 73%.
- Underneath the headline, part-time work for economic reasons jumped by 339,000 and the broader U-6 jobless rate rose to 7.9%.
The jobs report lands in a politically charged week: Democrats performed strongly in this week's midterm elections, winning control of Congress, in a vote in which disenchantment over the economy was a major factor, according to Reuters. The next test of the economy's direction comes on Tuesday, when the October consumer price report is released — and with it, a clearer picture of whether the Fed will raise rates in December.
