The United States added 165,000 jobs in October, significantly exceeding economists’ expectations and providing fresh evidence of resilience in the American labor market.
The unemployment rate edged down from 4.2 percent in September to 4.1 percent, according to the latest report released Friday by the U.S. Bureau of Labor Statistics. Economists had forecast the addition of approximately 65,000 jobs.
The report also included upward revisions to previous employment figures. August and September together recorded 84,000 more jobs than initially reported, with August revised to 186,000 and September to 60,000.
The figures come just days after the 2026 midterm elections, in which Democrats secured control of both chambers of Congress, delivering a major political setback to President Donald Trump and the Republican Party. Economic concerns, particularly the rising cost of living, were among the issues influencing voters.
Healthcare and Professional Services Lead Hiring
Several sectors recorded significant employment gains in October.
Professional and business services added 70,000 jobs, while healthcare employment increased by approximately 42,000. Manufacturing also recorded a gain of 19,000 jobs.
Transportation and warehousing added around 25,000 positions, according to the Labor Department.
Average hourly earnings rose by 0.4 percent from September, reaching $38.00. This was the largest monthly increase since January. However, wages were up just 3.1 percent compared with October 2025, highlighting the continuing pressure on workers’ purchasing power.
The labor force also expanded, with 421,000 people entering or returning to the workforce. The labor force participation rate increased slightly to 61.9 percent.
“This was a blowout jobs report,” said Angelo Kourkafas, senior global strategist at Edward Jones, describing the stronger-than-expected hiring, positive revisions, lower unemployment, and improved wage growth.
Federal Reserve Faces Pressure Over Interest Rates
The stronger employment figures could influence the Federal Reserve’s next decision on interest rates.
With hiring proving more resilient than expected and inflation remaining a concern, policymakers may have less reason to lower borrowing costs. Investors increased their expectations of a possible December rate hike following the report.
The Federal Reserve raised interest rates in September but left them unchanged at its October meeting.
Higher interest rates are typically used to slow inflation by making borrowing more expensive and reducing consumer and business spending.
Boston College economist Brian Bethune said another increase in December was likely, with the possibility of an additional hike in early 2027.
However, the outlook remains uncertain, as the Federal Reserve must balance the need to control inflation against the risk of weakening the labor market.
Hiring Remains Below Previous Years
Despite October’s strong figures, employment growth has been relatively modest over the longer term.
Employers added an average of approximately 86,000 jobs per month so far in 2026, compared with an average of around 9,700 per month in 2025.
That remains well below the average monthly gains of 166,000 recorded in 2023 and 2024, and far below the extraordinary hiring boom that followed the COVID-19 pandemic.
Economists have described the current environment as a “low-hire, low-fire” labor market. Employers are generally reluctant to dismiss existing workers but are also cautious about bringing on new employees.
This can create particular difficulties for young people entering the workforce and for workers who have recently lost their jobs.
Demographic changes are also affecting the number of jobs the economy needs to create to keep unemployment stable. Retirements among baby boomers and reduced immigration have contributed to slower growth in the available workforce.
Artificial Intelligence Changes the Employment Outlook
Another factor influencing hiring decisions is the growing use of artificial intelligence.
At SharkNinja, an appliance manufacturer based in Needham, Massachusetts, sales increased by 21 percent in the latest quarter. However, Chief Executive Mark Barrocas said the company plans to slow hiring growth to 5 percent next year, compared with 8 to 10 percent over the previous two years.
The company, which employs approximately 4,200 people worldwide, has introduced AI tools in areas including product development, media planning, and finance.
The experience illustrates a growing challenge for the American labor market: even companies experiencing strong sales growth may not need to expand their workforce at the same pace as in previous years.
While October’s employment report offers encouraging signs about the strength of the U.S. economy, questions remain about wage growth, inflation, affordability, and the longer-term impact of artificial intelligence on American jobs.
