US employers add 165,000 jobs in October as Fed rate hike bets jump

United States employers added 165,000 jobs in October, surpassing Wall Street expectations and demonstrating broad economic resilience across major industrial sectors.

The jobless rate fell to 4.1% alongside an uptick in labor force participation, according to official data released by the Department of Labor. September payroll gains were also revised upward from an initial estimate of 29,000 to 60,000 positions.

Economists surveyed ahead of the release had projected an addition of roughly 70,000 positions and expected the unemployment rate to remain unchanged.

Hiring expanded across several segments of the economy:

• Professional and business services generated 70,000 positions despite earlier industry concerns regarding automation and artificial intelligence disruptions.
• Healthcare providers added 42,000 roles, outpacing historical hiring trends in medical services.
• Transportation and warehousing payrolls climbed by 25,000 slots during the period.
• Manufacturing facilities expanded headcounts by 19,000 workers.

Wage growth accelerated during October. Average hourly earnings advanced 0.4% month over month, exceeding the 0.3% consensus forecast among market analysts. On an annual basis, wages increased 3.1%, beating estimates while remaining slightly below broader consumer inflation levels.

“This is still a low-hire, low-fire market overall, but we could be seeing some green shoots on the hiring side,” Jake Krimmel, senior economist at Realtor.com, said in an official statement.

Earlier indicators throughout the week pointed to steady workforce recruitment. The monthly Job Openings and Labor Turnover Survey revealed higher vacancies, while ADP reported 86,000 private payroll additions and corporate layoff announcements touched a three-year low.

“Consistent with prior, more partial indicators of the US labor market, the October Jobs Report came in very strong, across the board,” Mohamed El-Erian, economist at Wharton, stated publicly.

Federal Reserve monitors hiring strength ahead of interest rate decision

The labor expansion alters the policy calculus for the Federal Reserve. Central bank officials convene on December 9 to establish monetary policy, with financial markets pricing a 77% probability of a 25 basis point rate increase, compared to 67% prior to the report.

“Today’s jobs report is a strong rebuttal to fears that the economy is heading into a meaningful slowdown,” Seema Shah, chief global strategist at Principal Asset Management, said in a statement. “With wage growth also picking up, a December Fed hike remains firmly on the table despite the recent tightening in financial conditions.”

Policy makers will evaluate November labor metrics and October inflation prints prior to concluding their final interest rate vote of the year.