• Analysis
US job growth in October tops forecasts at 165,000 as unemployment falls to 4.1%
US job growth in October came in at 165,000, more than economists expected, and the unemployment rate slipped to 4.1%, according to Bureau of Labor Statistics data released on Friday.
Hiring beats a stuck labor market
The US economy added 165,000 jobs in October, ahead of what economists had forecast, in data the Bureau of Labor Statistics published on Friday. The unemployment rate moved down slightly to 4.1%.
Before the release, economists had described the labor market as stuck in a low-hire, low-fire state: sluggish job growth paired with few layoffs. The October figures cut against that picture, and earlier months were revised upward too.
- •August and September figures were revised up by a combined 84,000 jobs
- •Unemployment now stands at 4.1%
Where the jobs came from
Hiring in October was concentrated in four sectors: healthcare, transportation, warehousing and manufacturing.
Pay is still growing, though not fast enough to outrun rising prices. Average hourly earnings rose at an annual rate of 3.1%, a slight improvement on the previous month. September's annualized inflation rate was 3.7%, and inflation has recently outpaced wage growth.
Layoffs stay rare
The other half of the low-hire, low-fire description held. September layoffs fell to their lowest level in a year and a half, according to the Bureau of Labor Statistics.
Outplacement firm Challenger, Gray & Christmas tracked just under 44,000 layoffs in October, a 71% decrease compared with last October.
Prices and rates weigh on the picture
The report lands against a backdrop of cost pressure and tighter money. Gas prices average $1 a gallon more than a year ago because of the war in Iran, and diesel sits 60% above prewar levels.
The Federal Reserve raised interest rates in September for the first time since 2023, to a range of 3.75%-4%, citing inflation. Officials kept rates steady at their October meeting, and economists expect one more hike when the central bank meets in December.
Markets have been uneven as well. The tech-heavy Nasdaq briefly recovered on Wednesday before diving back into correction territory on Thursday, leaving it 10% or more below its recent peak amid worries over AI spending.
A recent midterm election solidified Democratic control of Congress for the next two years, with polls showing the economy as Americans' top frustration. Before the vote, Heather Long, chief economist at Navy Federal Credit Union, said:
Americans delivered a clear verdict in the midterm elections that the current economy is squeezing people financially and making it hard to get by
The next scheduled step is the Federal Reserve's December meeting, where economists expect one more rate hike.
