The U.S. Labor Department reported Friday that employers added 165,000 jobs in October, a figure that exceeded economist expectations. The unemployment rate decreased to 4.1% during the month, down from 4.2% in September.
The report follows a period of slower growth in 2025, when employers added an average of 10,000 jobs per month. In addition to the October gains, the Labor Department revised hiring data for August and September upward by a total of 84,000 jobs, indicating that previous months were more robust than initially recorded.
Job growth in October was concentrated in health care, manufacturing, business services, and the warehouse and transportation industry, which added 25,000 positions. Conversely, construction companies and restaurants reduced their payrolls. Economists polled by FactSet had anticipated a smaller gain of 65,000 jobs for the month.
Voter frustration regarding high prices contributed to Republicans losing their majorities in both the House and Senate during the recent midterm elections. The increase in energy prices, attributed to a conflict with Iran, continues to drive the cost of living upward. For the average household, this manifests as higher bills that exceed their annual wage increases, a situation Stahle noted will be felt more acutely the longer it persists.
The data provides the Federal Reserve, the U.S. central bank, with a basis to focus on lowering inflation rather than prioritizing job creation. While the Federal Reserve kept its benchmark interest rate steady last week, investors now anticipate an interest rate hike when policymakers meet in December. Higher interest rates typically increase the cost of borrowing for mortgages, credit cards, and business loans. The next major policy decision is expected following the central bank's December meeting.