US economy added 165,000 jobs in October, unemployment rate fell to 4.1%

The US economy added 165,000 jobs in October, surpassing expectations, according to new data released Friday by the Bureau of Labor Statistics.

Jobs and unemployment

The unemployment rate fell to 4.1% from 4.2%. Job growth in the previous two months was stronger than initially reported, with a total of 84,000 jobs added. August was revised upwards by 53,000 to 186,000, and September gains totaled 60,000, up from 29,000.

The consensus forecast for October called for monthly gains of 65,000 jobs and a 4.2% unemployment rate, according to FactSet estimates.

Wages and inflation

Wage growth slowed on an annual basis to 3.1% from an upwardly revised 3.2%. Americans’ pay gains are hovering around pre-pandemic levels; however, inflation is not. Prices have been rising faster in recent months, driven higher by a war-driven energy shock.

Much of the recent surge in prices is a result of higher energy prices stemming from the war in Iran, which began earlier this year and sent gasoline prices much higher, dragging up overall headline inflation. The Iran conflict is still not resolved and has been characterized by start-and-stop negotiations and sporadic military strikes. The halt of oil tankers through the Strait of Hormuz at various times has further exacerbated the energy supply shock.

Markets and politics

Stock futures were mixed after the jobs report. S&P 500 futures were up 0.2%. Nasdaq 100 futures were up 1.5%, bouncing back after a steep tech sell-off Thursday. Dow futures were down 450 points, or 0.87%.

The better-than-expected hiring offers some reassurance for an economy entering a new political chapter after the Democrats’ sweep in the midterm elections. Voters on Tuesday gave Democrats back control of both the House and the Senate in a major rebuke to Trump and Republicans. The economy, and discontent with it, was the top issue for voters heading into the polls. Continued inflation and high gas prices were a driving factor in making voters unhappy.

The Federal Reserve has also been closely monitoring the labor market as it weighs whether to raise interest rates again this year in order to drive down inflation. The Fed opted against a rate hike at its meeting last week, but most investors anticipate that the Fed will once again raise interest rates at its meeting in December.

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Sources

• cnn.com: The US economy added 165,000 jobs in October and the unemployment rate fell | CNN Business
• washingtonexaminer.com: Economy added 165,000 jobs in October, showing strength of expansion

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.