U.S. employers added 165,000 jobs in October, far more than expected, while unemployment fell to 4.1%, a stronger report that may affect the Federal Reserve’s next move on interest rates.
Economists had expected about 59,000 to 65,000 new jobs. Revised figures showed that August and September job gains were 84,000 higher together than first reported. Hiring was strongest in professional and business services, health care, and transportation and warehousing.
Manufacturing also added workers. Unemployment fell from 4.2% in September. A wider measure that includes people working part time involuntarily and people only loosely connected to the labor force rose to 7.9%.
Average hourly pay rose 0.4% for the month, exceeding some monthly forecasts. Pay rose 3.1% over the year, below the reported annual inflation rate. The figures show that hiring remained strong.
But the increase in involuntary part-time work suggests that the labor market’s strength is not uniform. Investors raised their expectations of a December rate hike after the report. The report added pressure on the Fed to weigh strong employment against concerns about inflation.
The jobs report does not determine the Fed’s decision. The decision will depend on incoming economic data. It will also depend on how policymakers assess price pressures.