Markets
October Payrolls Rose 165,000, Nearly Three Times Forecasts
US employers added 165,000 jobs in October, against about 59,000 expected, and unemployment fell to 4.1%, keeping a December Fed rate hike firmly in play.
The labour market handed the Federal Reserve's hawks a fresh argument. The Bureau of Labor Statistics reported on Friday, November 6, that nonfarm payrolls rose by 165,000 in October, against a Dow Jones consensus of 59,000, and that the unemployment rate fell to 4.1% from 4.2%. The two previous months were revised up by a combined 84,000: August now shows 186,000 new jobs and September 60,000, from 29,000 first reported. Average hourly earnings rose 0.4% in the month and 3.1% from a year earlier, both a tenth or two above forecasts.
The gains were spread across the economy rather than concentrated in one sector. Professional and business services added 70,000 jobs, healthcare 42,000, transportation and warehousing 25,000 and manufacturing 19,000. The separate household survey was stronger still, with employment up 463,000 and the labour force up 421,000, lifting participation to 61.9%. Seema Shah, chief global strategist at Principal Asset Management, called the report "a strong rebuttal to fears that the economy is heading into a meaningful slowdown", and Heather Long of Navy Federal Credit Union noted that in 2025 the economy "added barely 10,000 jobs a month and basically all were in healthcare."
Underneath the headline, the picture for people already out of work got worse. The U-6 rate, which adds discouraged workers and those in part-time jobs for economic reasons, rose 0.3 percentage point to 7.9%. The average spell of unemployment lengthened by 2.3 weeks to 27.1 weeks, the longest since September 2021, and about 1.96 million people had been jobless for more than 27 weeks, 27.6% of all the unemployed. "Now, the average unemployed person takes longer to find a job than their benefits would last," said Cory Stahle, senior economist at Indeed. Companies are hiring and firing less at the same time, which is good for those with a job and slow for those looking.
Bond traders read the report as a green light for the Fed. The probability of a quarter-point hike at the December 8–9 meeting rose to 76.8% in the CME FedWatch tool, from about 70% after Thursday's sell-off, and the 10-year Treasury yield edged up to about 4.86%. Stocks mostly looked past it: the S&P 500 rose 0.31% to 7,376.86 and the Nasdaq Composite 1.09%, led by a rebound in chip shares, while the Dow slipped 0.46% and gold fell 0.94% to $4,074.90.
The next test arrives on Tuesday. October's consumer price index will be published without a year-over-year rate for headline and core prices, because the BLS could not collect prices in October 2025 during the government shutdown, so the monthly change carries all the weight; forecasts range from about 0.2% to 0.3%. A soft reading would not on its own take a December hike off the table after Friday's numbers. A hot one, on top of 165,000 jobs and 3.1% wage growth, would make it very hard for the committee to wait.