'A blowout': US added 165,000 jobs in October, trouncing expectations

The US added 165,000 jobs in October, blowing past economists' expectations, as the labor market showed strength despite the Federal Reserve's recent rate hikes.

The unemployment rate ticked down to 4.1% even amid a slight increase in labor force participation. September's underwhelming jobs report of 29,000 additions was also revised upward to a gain of 60,000 jobs.

Heather Long, chief economist at Navy Federal Credit Union, deemed the results "a blowout" in a post on X .

Economists surveyed by Bloomberg projected a gain of about 70,000 jobs in October and saw the unemployment rate holding steady. Wage growth increased 0.4% from September, better than expectations for 0.3% month-over-month growth. Annual earnings rose 3.1%, beating expectations but likely still below the current inflation rate.

Employers added jobs in a number of sectors of the economy. Professional and business services, which had been seen as more vulnerable to AI-related disruptions, added 70,000 roles. Healthcare, long a strong spot for job growth, added a higher-than-average 42,000 positions.

Transportation and warehousing jobs rose by 25,000, and manufacturing continued to show strength with 19,000 additions.

"This is still a low-hire, low-fire market overall, but we could be seeing some green shoots on the hiring side," Jake Krimmel, senior economist at Realtor.com, said in a statement.

Other job market measures released earlier this week telegraphed steady hiring — though not to the extent of Friday's report blowout number. Job openings and hiring edged higher , the Labor Department's monthly Job Openings and Labor Turnover Survey showed; private employers added 86,000 jobs , according to ADP; and layoff plans dropped to a three-year low while seasonal hiring ramped up.

"Consistent with prior, more partial indicators of the US labor market, the October Jobs Report came in very strong, across the board," Wharton economist Mohamed El-Erian posted on X.

The solid report will likely give the Federal Reserve more confidence to move forward with another rate hike in December . The central bank will also consider November jobs data and October's inflation figures before its Dec. 9 rate decision. Traders currently see a 77% chance of a 25 basis point rate hike next month, up from 67% on Thursday, according to CME FedWatch.

"Today's jobs report is a strong rebuttal to fears that the economy is heading into a meaningful slowdown," Seema Shah, chief global strategist at Principal Asset Management, said in a statement. "With wage growth also picking up, a December Fed hike remains firmly on the table despite the recent tightening in financial conditions."

Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.