Key points
- US employers added 165,000 jobs in October, the Bureau of Labor Statistics said on Friday — more than double the 65,000 economists polled by Reuters had expected.
- The unemployment rate fell to 4.1% from 4.2% in September, even though 421,000 people entered the labour force, the Associated Press reported.
- September's jobs gain was revised up to 60,000 from 29,000, and August and September together were revised up by 84,000 jobs.
- Average hourly earnings rose 0.4% in October, the biggest monthly gain since January, and were up 3.1% on the year, the Associated Press reported.
- Professional and business services led the gains with 70,000 new jobs, followed by health care with 42,000, Barron's reported, citing the Bureau of Labor Statistics.
- Traders raised the odds of a Federal Reserve interest-rate rise in December to about 78%, from 70% before the report, Reuters reported.
US employers added far more jobs than expected in October, in a report that suggests the American labour market is holding up better than feared — and that gives the Federal Reserve more room to keep its focus on inflation. Nonfarm payrolls rose by 165,000 last month, the Bureau of Labor Statistics said on Friday, after an upwardly revised gain of 60,000 in September. Economists polled by Reuters had forecast an increase of 65,000, with estimates ranging from 35,000 to 125,000.
The key figures
| Measure | Figure | Source |
|---|---|---|
| Nonfarm payrolls, October | +165,000 | Bureau of Labor Statistics |
| Economists' forecast (Reuters poll) | +65,000 | Reuters |
| Unemployment rate | 4.1%, down from 4.2% in September | Bureau of Labor Statistics |
| September payrolls (revised) | +60,000, from +29,000 | Bureau of Labor Statistics |
| August and September revisions combined | +84,000 | Bureau of Labor Statistics, via AP |
| Average hourly earnings | +0.4% on the month; +3.1% on the year | Bureau of Labor Statistics, via AP |
| People entering the labour force in October | 421,000 | Associated Press |
| Professional and business services jobs added | +70,000 | Bureau of Labor Statistics, via Barron's |
| Health care jobs added | +42,000 | Bureau of Labor Statistics, via Barron's |
| Average monthly payroll gain over the previous 12 months | 48,000 | Bureau of Labor Statistics |
| Chance of a Federal Reserve rate rise in December | About 78%, from 70% before the release | Reuters; CME FedWatch |
A broad-based gain
The gains were spread across sectors. Professional and business services added 70,000 jobs and health care added 42,000, Barron's reported, citing the Bureau of Labor Statistics, while private employers accounted for 159,000 of the new jobs and government payrolls rose by 6,000. The October gain was well above the average monthly increase of 48,000 over the previous 12 months, the Bureau of Labor Statistics said.
The unemployment rate fell even though 421,000 people joined the labour force, the Associated Press reported. Average hourly earnings rose 0.4% from September — the biggest monthly gain since January — and were up 3.1% on the year, the Associated Press reported. Reuters noted that economists estimate the economy needs to create at least 40,000 jobs a month to keep up with growth in the working-age population, a threshold October's figure cleared comfortably.
What it means for the Federal Reserve
The strong report is likely to keep the Federal Reserve on course to raise interest rates at its next meeting in December, after it held its benchmark rate at 3.75% to 4.00% last week. Traders raised the odds of a December rise to about 78%, from 70% before the release, Reuters reported, and Treasury yields rose and the dollar strengthened after the figures were published.
The report comes three days after voters delivered a heavy defeat to President Donald Trump's Republican Party in the midterm elections, the Associated Press reported, with the economy and the Middle East conflict among the issues that cost Republicans control of Congress. Reuters said the labour market's resilience gives the Fed more scope to focus on inflation stemming from the Middle East conflict.
What happens next
The next big test for the economy comes on Tuesday, when the Bureau of Labor Statistics publishes October's consumer inflation report, Reuters reported. The Federal Reserve's final meeting of the year is on 8–9 December, Barron's reported.
Europe Unfolded will report the inflation figures, and any response from the Federal Reserve, as they are confirmed.
Updates & corrections
Published 7 November 2026.
No updates or corrections have been made to this article since publication.
Sources
- Reuters, "US job growth beats expectations in October; unemployment rate falls to 4.1%", 6 November 2026, on payrolls rising by 165,000, the 65,000 forecast in its poll of economists, the September revision to 60,000, the unemployment rate falling from 4.2% to 4.1%, the Federal Reserve holding its benchmark rate at 3.75% to 4.00% last week, economists expecting a December rate rise, the odds of that rise climbing to about 78% from 70%, the breakeven rate of 40,000 jobs a month, and the October inflation report due on Tuesday: reuters.com
- Associated Press, "US employers added a surprising 165,000 jobs in October; unemployment rate dipped to 4.1%", 6 November 2026, on 421,000 people entering the labour force, average hourly earnings rising 0.4% in October and 3.1% on the year, the combined August–September revision of 84,000 jobs, and the report coming three days after the midterm elections: economictimes.indiatimes.com
- Barron's, "U.S. Adds a Hotter-Than-Expected 165K Jobs. The Fed Has Plenty of Room for a Rate Hike.", 6 November 2026, on professional and business services adding 70,000 jobs, health care adding 42,000, private payrolls rising by 159,000 and government payrolls by 6,000, and the Federal Reserve meeting on 8–9 December: barrons.com
- Reuters, "Strong October jobs report sends yields higher", 6 November 2026, on Treasury yields rising and the dollar strengthening after the release: reuters.com