U.S. employers added 165,000 jobs in October, substantially exceeding economists’ expectations and signaling renewed momentum in the labor market as hiring strengthened across several industries, according to the latest report from the U.S. Bureau of Labor Statistics (BLS).
The unemployment rate also edged down to 4.1%. The unemployment rate has remained within a narrow range of 4.1% to 4.3% since March.
The report also included significant upward revisions to previous months. August job growth was revised from 133,000 to 186,000, while September was revised from 29,000 to 60,000. The combined revisions added 84,000 jobs to previous estimates, bringing the three-month average to 137,000.
“October’s job numbers surpassed economist forecasts and reflect the strength of our overall healthy jobs market,” said Amy Glaser, senior vice president at Adecco. “This is a promising update and underscores a resilient economy while signifying a strong end to the year for both employers and employees.”
Andrew Flowers, chief economist at Appcast, described the results as evidence that the labor market is reaccelerating. The six-month moving average of job gains has reached 83,000, comfortably above the estimated break-even rate needed to keep pace with labor force growth, he said.
“The labor market is more than holding its own. It’s expanding, and not just from healthcare and AI in this report,” Flowers said. “It’s possible the white-collar hiring freeze is at a turning point.”
October’s results build on other encouraging labor market indicators released this week. Initial jobless claims and layoffs are down, while job openings and worker quits have increased.
“Despite sticky inflation, hiring is back to the momentum we saw in August,” said Nicole Bachaud, labor economist at ZipRecruiter. “Taken together with this week’s JOLTS report, which showed more workers quitting, October’s jobs report suggests workers are ready to move, and employers are finally hiring at a similar pace.”
However, stronger headline numbers do not necessarily mean workers are experiencing an improved labor market.
“More jobs doesn’t always mean better jobs,” Bachaud said. “Wage growth is still trailing inflation, and more workers who want full-time jobs are stuck in part-time roles.”
Glassdoor Chief Economist Daniel Zhao said that “Workers still don’t feel like the current job market is working for them. A few more months of continued and consistent improvement would go a long way toward breaking workers out of the funk they’re in.”
He added that the combination of expanding hiring, lower unemployment, and firmer wage growth offers reasons for cautious optimism.
Cory Stahle, a senior economist at Indeed, cautioned that significant challenges remain for job seekers. Over the past 12 months, employers added 885,000 jobs, but healthcare and social assistance accounted for 519,000 of those gains, or roughly 60% of the total job growth.
“There is still a lot of tarnish in the job market beneath the headline shine, and much of the pain continues to be felt by unemployed workers seeking a way in,” Stahle said.
However, Indeed job postings recorded their first year-over-year increase in more than four years this fall, offering an early indication that employer demand may be improving.
Ger Doyle, regional president, North America, at ManpowerGroup, said the BLS report is consistent with Manpower’s real-time hiring data showing stronger demand.
“This is a strong report and a real sign of momentum in the labor market,” Doyle said. “The question now is how far that strength reaches. Demand is clearly picking up in parts of the economy, but we need to see it spread into more industries and create more opportunities for workers before we call this a broader hiring recovery.”
The report arrives as the Federal Reserve weighs its next interest-rate decision, with inflation remaining stubbornly above its 2% target. Whether the central bank resumes raising rates in December could influence business investment and hiring decisions heading into 2027.
Industry Breakdown
U.S. job growth broadened across industries in October, with professional and business services leading employment gains and manufacturing, and transportation and warehousing also adding workers. The results suggest hiring momentum is extending beyond healthcare, which has accounted for a disproportionate share of job creation in recent years.
Professional and business services added 70,000 jobs, well above the sector’s average monthly gain of 15,000 over the previous 12 months. Healthcare added 42,000 jobs, transportation and warehousing gained 25,000, and manufacturing employment increased by 19,000.
Manufacturing employment has now grown by 101,000 jobs since December 2025, with gains in computer and electronic product machinery and primary metal manufacturing.
Flowers said the breadth of hiring represents an encouraging shift. The three-month diffusion index, which measures the share of industries expanding payrolls against those contracting, shows that approximately 80% of industries are adding jobs, he said.
The rebound in white collar hiring is notable given concerns that artificial intelligence could reduce demand for professional and administrative roles, as well as reports of experienced workers struggling to find comparable employment.
The manufacturing gains offer another positive signal, particularly as investment in data centers, semiconductors, and related infrastructure supports demand for specialized workers. However, the data center build-out produced mixed results: Construction employment declined by 3,000, including losses in nonresidential construction, while utilities also shed jobs, Flowers said.
“We’re seeing more demand for engineering and manufacturing roles, along with continued growth in logistics,” Doyle said. “Much of that demand is tied to data centers and semiconductors, as well as broader infrastructure investment and moving goods.”
Transportation and warehousing added nearly 25,000 jobs, with much of the increase concentrated in couriers and messengers.
Glaser said gains in professional services, healthcare and warehousing align with employers preparing for peak-season demand. The momentum suggests businesses are addressing both immediate and future staffing needs, she said.
Temporary help services also recorded strong growth. Noah Yosif, chief economist at the American Staffing Association, said the sector added 18,000 jobs in October, its largest monthly gain of 2026. The recovery has generated 74,600 jobs this year.
Bachaud noted that temporary staffing’s rebound may indicate employers are preparing to scale up quickly as demand improves.
Unemployment Dips
More Americans entered the workforce in October, helping push the unemployment rate down to 4.1%. But beneath the encouraging headline numbers, rising long-term unemployment and an increase in involuntary part-time work point to persistent challenges for job seekers.
“The labor force grew by 421,000 people, pushing participation to 61.9%, the third month of increase, solidifying the trend that more people are coming back to work,” Bachaud said. She noted that job leavers and workforce reentrants also increased, consistent with recent data showing greater worker mobility.
However, not everyone entering the workforce is finding the employment they want, she said.
The number of people working part time for economic reasons increased by 339,000 to 4.84 million. Meanwhile, the broader U-6 unemployment rate, which includes discouraged workers and people working part time for economic reasons, rose to 7.9% from 7.6%.
Perhaps the most troubling indicator was the increase in long-term unemployment. The average duration of unemployment climbed 2.3 weeks to 27.1 weeks, its highest level since September 2021. Nearly 2 million people have been unemployed for at least 27 weeks, representing 27.6% of all unemployed workers.
“The rise in long-term unemployment in a job market expansion is unusual, and the size of the increase is not something we’ve seen in any past expansion,” Zhao said.
Stahle said prolonged job searches are especially difficult for people seeking their first jobs or trying to reenter the workforce. “More than a quarter of unemployed workers were searching for six months or longer in October, a share rarely seen outside the aftermath of a recession,” he said.
Wage Growth
U.S. workers saw stronger-than-expected wage growth in October, offering some relief as persistent inflation continues to erode purchasing power. Average hourly earnings increased 0.4% for the month and 3.1% over the past year, exceeding economists’ forecasts of 0.3% and 2.9%, respectively.
Flowers pointed to accelerating wage gains among frontline workers, whose nominal earnings increased 3.3% year over year and at an annualized rate of 4.1% over the past three months.
Still, wage increases remain insufficient to offset rising living costs.
Doyle noted that workers feel financial pressure even when they retain their jobs. “People don’t have to lose their jobs to feel squeezed. Their paycheck just doesn’t go as far, and finding a new or better paying job is still hard,” he said.
“Wages continue to trail inflation,” Yosif said. “Workers are keeping their jobs at the literal expense of their own paychecks.”
He added that the Federal Reserve’s next move could add another complication. With inflation remaining elevated, another interest-rate increase is widely anticipated in December.
“An additional rate hike may help workers’ paychecks go further, but at the cost of further pressure on job creation and hiring,” Yosif said.
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