U.S. employers added 165,000 jobs to their payrolls in October, and the unemployment rate fell a tenth of a percentage point to 4.1%, the Labor Department announced Friday. The results smashed expectations for job growth closer to 60,000 and provided fresh evidence that the U.S. economy remains resilient despite widespread concerns about war, inflation and the possibility of AI-driven job losses in the not-too-distant future.
Job growth in August and September was revised higher by a combined 84,000, as well, indicating that the labor market is stronger than previously understood. Over the last three months, job growth has averaged 137,000 a month.
The drop in the unemployment rate is particularly notable since it occurred even as more people entered the job market, as reflected by an uptick in the labor market participation rate to 61.9%.
Sectors adding jobs included professional and business services (70,000), healthcare and social assistance (55,100), transportation and warehousing (24,800), finance (7,000) and government (6,000). The manufacturing sector also saw growth, as employers added 19,000 jobs, driven in large part by the buildout of artificial intelligence infrastructure.
What analysts are saying: The October jobs came as a pleasant surprise to many analysts, with some noting that the unemployment rate has been below 4.5% for 61 months, surpassing a streak of low unemployment in the late 1960s.
“Job growth snapped back nicely in October,” JPMorgan’s Michael Feroli wrote in a research note. “Today’s numbers fit in with other jobs indicators pointing to an improvement in autumn labor market activity.”
“You have to look pretty hard to find something to dislike in there,” said Dan North, senior economist at Allianz Trade North America, per CNBC. “It’s a really, really good report, and all around I think you’d say it’s stronger than expected and the best one in a while, and it kind of fits with what I call the stable but perhaps unexciting labor market.”
Heather Long, chief economist at Navy Federal Credit Union, said the “blowout jobs report” is “strong on every level.” The latest data shows that the “US economy is averaging nearly +86,000 job gains a month in 2026,” Long added. “That's much better than the anemic +10,000 average in 2025.”
One sour note, though, is wage gains. Although wages grew a better-than-expected 0.4% from September to October, and 3.1% over the previous 12 months, inflation has wiped out all wage gains for the past seven months. “In fact,” Long said, “the inflation resurgence has been so strong that it's basically wiped out all wage gains since January 2025.”
Cory Stahle, an economist with the Indeed job-search website, said inflation, which played a major role in the recent midterms, remains a central issue. “Workers are losing ground right now,” he told NPR. “The longer it wears on, the more and more they're going to feel that.”
Another worry lurking in the data: It’s getting harder for workers who need a job to find one. More jobless workers are experiencing long-term unemployment, with the percentage of those unemployed for more than 27 weeks rising to 27.6% of all jobless workers in October, the highest since 2021. This is a symptom of what economists are describing as a low-hire, low-fire economy, in which the unemployment rate remains low, but workers have difficulty finding new jobs if they need one. Nearly 2 million Americans are now long-term unemployed.
Nevertheless, the labor market is showing signs of strength, and could be shifting into a higher gear, which could help chip away at the long-term employment numbers. “This report changes our view on the labor market,” PNC Economics said in a research note. “The strength was very broad based, with hiring, the unemployment rate, and wage gains all pointing in the same direction. We thought the bar was high for this month’s jobs report to matter much given the ongoing jitters around the AI buildout, and this report likely cleared it.”