US economy added 165,000 jobs in October, beating expectations

The U.S. economy added 165,000 jobs in October, according to new data from the Bureau of Labor Statistics (BLS).

The unemployment rate also decreased slightly to 4.1 percent, the BLS reported . Unemployment has been below 5 percent for more than five years, after soaring to nearly 15 percent in the early stages of the COVID-19 pandemic.

The data far exceeded prior projections, as economists polled by The Wall Street Journal expected 59,000 added jobs in October. Those economists also expected the unemployment rate to hold steady at 4.2 percent.

The BLS reported last month that the economy added 133,000 jobs in August and 29,000 jobs in September . But the BLS tweaked its numbers on Friday to show employers added 186,000 jobs in August and 60,000 jobs in September.

Erin McLaughlin, a senior economist at the Conference Board, noted earlier this week the U.S. economy is running close to “full employment.”

She added, “Almost anyone that wants a job has a job. Now, that doesn’t mean that they are happy. … Their wages may not be keeping up with inflation.”

A majority of the added jobs in October stemmed from the professional and business services and healthcare industries, which saw respective gains of 70,000 jobs and 42,000 jobs last month. Both industries saw higher job growth than their average monthly gains over the prior year.

Manufacturing, meanwhile, added 19,000 jobs in October. The industry has added 101,000 jobs since reaching a “recent low” in December 2025, the BLS noted.

The number of employees who worked part time for economic reasons rose by 339,000 in October, reaching 4.8 million.

The overall labor force participation rate increased slightly, from 61.8 percent in September to 61.9 percent in October. The labor force participation rate has remained above 61 percent since May 2020, reaching a six-year peak of 62.8 percent in August and November of 2023.

“The US labor market has significantly outperformed my expectations this year — at the beginning of the year, I thought we’d be at an unemployment rate of 4.60% by October, instead we’re at 4.14%,” economist Guy Berger, a senior adviser on labor markets at Access/Macro, wrote Friday on social media.

Average hourly earnings increased by 14 cents from September to October, hitting $38, the BLS reported. Hourly earnings, on average, were up 3.1 percent relative to October 2025.

Annual inflation in September was 3.7 percent , according to the BLS’s consumer price index (CPI). That marked the seventh consecutive month of inflation of more than 3 percent, as higher fuel prices amid the Iran war have strained Americans this year.

The BLS will release CPI data for October on Tuesday. The Federal Reserve Bank of Cleveland projects that the inflation metric will measure last month’s prices as up by 3.7 percent from October 2025.

Persistent inflation, coupled with the steady job market, spurred Federal Reserve officials to raise interest rates in September — the first hike since the summer of 2023.

While the Federal Open Market Committee kept rates at a range of 3.75 percent to 4 percent last week , traders as of Friday are pricing in a 73 percent chance of another quarter-point hike at the panel’s next meeting in early December, according to the CME FedWatch tool .

Stubborn inflation also contributed to Democrats flipping the Senate and House in this week’s midterms , as voters punished Republicans and President Trump for the high cost of living .