US employers added 165,000 jobs in October, more than two and a half times the 65,000 economists had expected, and the unemployment rate fell to 4.1 per cent, the Labor Department said on Friday. The report pointed to a labour market that remains resilient despite months of weak hiring, and it arrived a day after Wall Street suffered its worst sell-off since April 2025.
The Bureau of Labor Statistics also revised the previous two months higher. August’s gain was raised by 53,000 to 186,000, and September’s by 31,000 to 60,000 — a combined 84,000 more jobs than previously reported. Economists polled by Reuters had forecast a gain of 65,000, with estimates ranging from 35,000 to 125,000. Economists estimate the economy needs roughly 40,000 new jobs a month to keep pace with growth in the working-age population.
Professional and business services led October’s hiring with 70,000 new jobs, far above its average monthly gain of about 15,000 over the previous year. Average hourly earnings rose 14 cents to $38.00, up 0.4 per cent on the month and 3.1 per cent on a year earlier. The labour force participation rate edged up to 61.9 per cent.
The figures give the Federal Reserve more scope to focus on inflation stemming from the Middle East conflict. The Fed left its benchmark overnight interest rate in the 3.75%–4.00% range last week, and economists expect a rate rise in December. Next Tuesday’s consumer inflation report for October could offer more clues on the course of monetary policy in early 2027.
Not all of the detail was encouraging. The number of people working part time for economic reasons rose by 339,000 to 4.8 million, and long-term unemployment held at 2.0 million, or 27.6 per cent of all unemployed people. Economists also noted that job gains are lagging economic growth — gross domestic product rose at a 3.4 per cent annualised rate in the third quarter — and that limited opportunities have made it harder for young adults and recent graduates to find work.
The Frances Perkins Building in Washington, pictured, is the headquarters of the Department of Labor, whose Bureau of Labor Statistics compiles the monthly employment report.
Sources: Reuters, “US job growth beats expectations in October; unemployment rate falls to 4.1%” (https://www.reuters.com/business/us-job-growth-beats-expectations-october-unemployment-rate-falls-41-2026-11-06/); USA Today, “U.S. economy added 165,000 jobs in October, above expectations” (https://www.usatoday.com/story/money/economy/jobs-labor/2026/11/06/october-2026-jobs-report-unemployment-rate/92562869007/).
