The US economy added 165K jobs in October while the unemployment rate slipped to 4.1% from 4.2%, the Bureau of Labor Statistics reported Friday.
The gain blew past forecasts and came in at more than triple the average monthly gain of 48K over the prior 12 months.
Revisions sweetened the picture. August moved up by 53K to 186K and September rose by 31K to 60K, leaving the two months a combined 84K higher than first reported. September's earlier 29K gain had come in under the roughly 40K a month economists estimate the economy needs to keep pace with population growth.
Hiring spread beyond healthcare
Professional and business services led with 70K new jobs, well above its 15K monthly average over the past year, and the industry has added 269K jobs since a recent low in October 2025. Education and health services added 53K, including 16K in hospitals and 11K in home health care.
Transportation and warehousing picked up 25K ahead of the holiday shopping season, and manufacturing rose 19K across computer and electronic products, machinery, and primary metals. Manufacturing has added 101K jobs since a low in December 2025.
Professional Services Led October Hiring While Leisure and Hospitality Shed Jobs
Change in US nonfarm payrolls by industry, October 2026, thousands, seasonally adjusted
Bar chart. Change (thousands). Professional and business services: Change (thousands) 70. Education and health services: Change (thousands) 53. Transportation and warehousing: Change (thousands) 24.80. Manufacturing: Change (thousands) 19. Financial activities: Change (thousands) 7. Retail trade: Change (thousands) 6. Other services: Change (thousands) 6. Government: Change (thousands) 6. Utilities: Change (thousands) 0.10. Mining and logging: Change (thousands) -1. Information: Change (thousands) -1. Construction: Change (thousands) -3. Wholesale trade: Change (thousands) -9.10. Leisure and hospitality: Change (thousands) -13.
Source: BLS
Not every corner grew. Leisure and hospitality cut 13K positions, wholesale trade shed 9.1K, and construction lost 3K. Even so, the share of industries reporting growth climbed to 57.6% from 54.2% in September.
The Fed is the audience
Traders lifted the odds of a quarter-point rate hike at the Dec. 8-9 meeting to 76.8%, up from 66.9% Thursday, per CME Group's FedWatch tool. The Fed's October hold left the benchmark rate at 3.75% to 4.00%, with inflation still above its 2% target.
Wage growth stayed mild, which economists read as a sign the labor market isn't fueling inflation. Average hourly earnings rose 14 cents, or 0.4%, to $38.00, up 3.1% over 12 months.
The labor force expanded by 421K in October, and household employment rose 463K, more than enough to absorb the newcomers. Participation edged up to 61.9%.
Underneath the headline, the picture is less comfortable for people already out of work. The number employed part time for economic reasons jumped 339K to 4.84M, and the average duration of unemployment rose 2.3 weeks to 27.1 weeks. The long-term unemployed, jobless for 27 weeks or more, held at 2.0M, or 27.6% of all unemployed people.
Job growth still runs behind the economy itself. Gross domestic product grew at a 3.4% annualized rate in the third quarter, powered by consumer spending and heavy investment in AI.
Through October, job growth has averaged 86,100 a month, a step up from the sub-10,000 pace of last year but still below 2024 and pre-pandemic levels.
The three-month average for payroll gains now sits at 137K, up from 79K through September. Next Tuesday's October consumer inflation report lands before the Fed's Dec. 8-9 meeting.
