US economy adds 165,000 jobs in October as unemployment falls to 4.1%

In brief

• US employers added 165,000 jobs in October, well above the 59,000 economists had expected.
• The unemployment rate fell to 4.1% from 4.2% in September.
• Wage growth edged up, but inflation of 3.7% in September still outpaced pay gains.

Job gains beat expectations

Hiring accelerated in October. According to the Labor Department's monthly data, payrolls grew by 165,000, far more than the 59,000 economists had expected (U.S. economy added 165,000 jobs in October, way more than expected; unemployment rate at 4.1% – CNBC). The jobless rate fell to 4.1% from 4.2% in September (Hiring jumps: The economy added 165,000 jobs last month – NPR).

Revisions and sectors

Figures for the two previous months were revised upward by 84,000 jobs combined. Health care, manufacturing and business services added workers, while restaurants and construction firms reduced staff. The warehouse and transportation sector gained 25,000 positions.

Wages and inflation

Hourly pay for workers picked up to an annual pace of 3.1%, slightly quicker than the previous month (US job growth exceeds expectations in October despite economic uncertainty – The Guardian). Inflation has nonetheless outpaced wage growth in recent months, with the annualized inflation rate at 3.7% in September (The U.S. added 165,000 jobs in October, a bright spot for the economy – NBCNews.com).

Labor market stability

Apollo Global Management's chief economist Torsten Slok said the unemployment rate had stayed below 5% for 61 straight months through September. Diane Swonk, chief economist at KPMG, said layoffs have remained scarce, but turnover is low and fewer people are entering the labor force.

Outlook

Some economists expect the Federal Reserve to raise interest rates in December, given steady hiring alongside persistent inflation. Investors pushed Treasury yields higher after the report (Strong October jobs report sends yields higher – Investing.com).