The U.S. economy added 165,000 nonfarm payroll jobs in October, the Bureau of Labor Statistics reported Friday. That was well above the Dow Jones estimate of 59,000. The unemployment rate fell to 4.1%, slightly below the forecast of 4.2%.
Prior months were revised up. The August gain was raised to 186,000, an increase of 53,000. The September gain was raised to 60,000, an increase of 31,000.
A broader measure of unemployment that includes discouraged workers and those in part-time jobs for economic reasons rose 0.3 percentage point to 7.9%. The civilian labor force grew by 421,000.
Average hourly earnings rose 0.4% for the month and 3.1% from a year earlier. Economists had expected 0.3% and 2.9%. The average workweek held at 34.4 hours.
Professional and business services led job gains with 70,000. Healthcare added 42,000, transportation and warehousing added 25,000, and manufacturing added 19,000.
Dan North, senior economist at Allianz Trade North America, called the report "a really, really good report" and said it was "stronger than expected and the best one in a while." Seema Shah, chief global strategist at Principal Asset Management, said the data was "a strong rebuttal to fears that the economy is heading into a meaningful slowdown."
Long-term unemployment rose sharply. The average duration of unemployment climbed 2.3 weeks to 27.1 weeks, the highest since September 2021. The number of people unemployed for more than 27 weeks rose to 1.96 million, the most since December 2021.
Traders increased their odds of another quarter-point Federal Reserve rate hike at the Dec. 8-9 meeting to 76.8%, according to CME Group's FedWatch tool. Treasury yields rose across the board, while the stock market reaction was muted.