US payrolls jump 165,000 in October, jobless rate dips

US nonfarm payrolls rose by 165,000 in October, far exceeding the 65,000 increase that had been expected. The unemployment rate fell to 4.1 percent from 4.2 percent the previous month.

Wages cool further

Nominal wage growth slowed to 3.1 percent in October from 3.2 percent, a figure that came in above the 2.9 percent forecast for the period. Inflation was cited alongside the wage figures at 3.7 percent. The payroll gain was more than double what forecasters had penciled in.

Labour market data through 2026 have been very volatile, and a single surprisingly strong report should not be over-interpreted on its own.

Fed’s December calculus

The Federal Reserve’s December decision will depend mainly on whether higher energy prices pass through to the broader economy. That question, more than the October payroll surprise itself, appears set to shape the central bank’s next move.

Separately, the unemployment rate had stood at 4.2 percent in September. The October reading of 4.1 percent marks a modest improvement from that level.

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Related: Canada Unemployment Rate Rises to 6.7% in October · US Unemployment Rate Falls to 4.1% in October

Data: FRED — St. Louis Fed