US Jobs Smash Forecasts: 165,000 Added, Unemployment Falls to 4.1%

The US added 165,000 jobs in October, more than double the 65,000 forecast, and unemployment fell to 4.1%. The Bureau of Labor Statistics report, released at 8:30 a.m. ET on Friday, November 6, showed a labor market far stronger than economists expected — one day after Wall Street's worst sell-off in 19 months.

What happened in the October jobs report?

Nonfarm payrolls rose by 165,000 in October, the Labor Department said. Economists polled by Reuters had expected about 65,000, after September's originally reported gain of just 29,000. September was revised up to 60,000, and revisions to the prior two months added a combined 84,000 jobs. The unemployment rate slipped to 4.1% from 4.2% in September, even though 421,000 people entered the labor force. Average hourly earnings rose 0.4% in the month and 3.1% from a year earlier, both above forecasts of 0.3% and 2.9%.

Gains were broad-based, led by professional and business services, healthcare, and transportation and warehousing, according to coverage of the report. The three-month average pace of hiring jumped to about 137,000, from roughly 51,000 a month earlier once revisions are included.

Why is this report blowing up?

Timing is everything. The report landed the morning after the Nasdaq Composite plunged 5.52% into correction territory and the S&P 500 fell 4.36%, as investors feared tighter AI regulation and a data-center slowdown after the Democratic midterm sweep. A weak jobs number could have deepened the rout. Instead, hiring came in at more than two-and-a-half times some consensus estimates of 59,000 to 62,000 — and that changed the conversation from recession risk to interest rates.

For the Federal Reserve, a resilient labor market removes the main obstacle to focusing on inflation. The Fed held its benchmark rate at 3.75% to 4.00% last week. Traders quickly raised bets on a December hike: Reuters put the odds at 78% after the data, up from 70% earlier, while other trackers using CME FedWatch put them at 73% to 75%. A hike on December 9 would lift the target range to 4.00% to 4.25%.

How did markets react?

Bonds moved first. The 10-year Treasury yield rose to about 4.88%, briefly touching 4.89% to 4.90%, and the 2-year yield rose about 5 to 6 basis points to around 4.52%. The dollar strengthened. Stocks, by contrast, were largely steady in the immediate reaction, according to Barron's — the strong report cemented hike expectations that were already high, rather than creating a new shock. That calm matters after Thursday, when chipmakers and AI-linked stocks led a sell-off that erased trillions in market value.

There is a catch for workers inside the good news. Wage growth of 3.1% a year still trails inflation, which was 3.7% in September, so real pay continues to shrink. Reuters commentary on the report noted that real average hourly earnings have fallen year over year, even as nominal wages firm. In other words, more people are working and pay is rising — just not fast enough to outrun prices.

Key facts

• Payrolls: +165,000 in October, vs about 65,000 expected.
• Unemployment: 4.1%, down from 4.2% in September.
• Revisions: +84,000 added to the prior two months; September revised to +60,000.
• Wages: +0.4% in the month, +3.1% year over year.
• Fed odds: December hike bets rose to roughly 73% to 78% after the release.
• Yields: 10-year Treasury at about 4.88% after the data.

Sources: Reuters, Reuters via SRN News, Investor's Business Daily, Barron's, CoinDesk.

What happens next?

The next test arrives quickly. October consumer inflation data is due on Tuesday, and it is the last major price report before the Fed's December 8-9 meeting. If inflation also runs hot, markets will treat a December hike as close to certain. If it cools, the strong jobs report alone may not be enough. For now, the takeaway is simple: the US labor market did not crack after the midterm shock and the AI sell-off — it accelerated. This article reports what happened and how markets reacted; it is not financial advice.

FAQ

How many jobs did the US add in October 2026?

The US added 165,000 nonfarm jobs in October 2026, more than double the roughly 65,000 economists expected.

What is the US unemployment rate now?

The unemployment rate fell to 4.1% in October, down from 4.2% in September.

Does a strong jobs report mean the Fed will hike rates in December?

It makes a hike more likely. Traders raised December hike odds to about 73% to 78% after the report, though October inflation data due Tuesday will also shape the decision.

Why did Treasury yields rise after the report?

Stronger hiring and wage growth increased expectations of a Fed rate hike, pushing the 10-year Treasury yield to about 4.88%.