US employers added 165,000 jobs in October, well above the 65,000 economists polled by Reuters had expected, while the unemployment rate fell to 4.1% from 4.2% in September, the Labor Department’s Bureau of Labor Statistics said on Friday.
September’s jobs gain was revised up to 60,000 from 29,000 previously reported. Economists’ estimates for October had ranged from 35,000 to 125,000.
Reuters reported that the resilient labour market gives the Federal Reserve more scope to focus on inflation stemming from the Middle East conflict. The Fed last week left its benchmark overnight interest rate in the 3.75%–4.00% range, and economists expect a rate hike in December; bets on a December hike rose to 78% after the data, from 70% earlier.
Economists estimate the economy needs at least 40,000 new jobs a month to keep up with growth in the working-age population, a breakeven rate down from roughly 150,000 in 2024 because of the smaller labour force. Job gains still lag economic growth — GDP grew at a 3.4% annualised rate in the third quarter. Reuters also reported that foreign-born workers led the recent gains in the labour force, manufacturing has added 101,000 jobs since December 2025, and professional and business services added 70,000 jobs in October. Limited opportunities have made it harder for young adults and recent graduates to find work.
Reuters noted that discontent over the economy and anger over the Middle East conflict cost President Donald Trump’s Republican Party control of Congress in this week’s midterm elections.
Source: Reuters
