US job growth in October exceeded expectations as employers added 165,000 jobs, even as wage gains continued to trail inflation. The Bureau of Labor Statistics report released on November 6, 2026, showed unemployment edging down to 4.1%, alongside upward revisions to hiring in the previous two months.
Summary
Key takeaways
- August and September payroll gains were revised upward by a combined 84,000 jobs.
- Annual wage growth of 3.1% remained below September’s 3.7% inflation rate.
- September job openings increased, while layoffs reached an 18-month low.
October US job growth beats expectations
The October employment gain surpassed economists’ forecasts, while revisions strengthened the picture for earlier months. The BLS added a combined 84,000 jobs to its previous estimates for August and September.
Economists had described a labor market marked by slow hiring but few layoffs. October’s stronger-than-expected increase and slightly lower unemployment rate offered evidence of resilience despite inflation and the ongoing war in the Middle East.
Wage gains lag inflation as several sectors add jobs
Average hourly earnings increased 3.1% annually, a slightly faster pace than the previous month. That remained below September’s annualized inflation rate of 3.7%, continuing the gap between pay growth and price increases.
Healthcare, transportation, warehousing and manufacturing all recorded employment gains. Yet stronger US job growth in October came against persistent pressure on household spending: gasoline averaged $1 more per gallon than a year earlier because of the war in Iran, while diesel cost 60% more than before the war.
The report followed midterm elections that secured Democratic control of Congress for the next two years. Polls had identified economic conditions, particularly gasoline and grocery prices, as a leading source of frustration.
Before the jobs report, Heather Long, chief economist at Navy Federal Credit Union, described that financial strain in a statement: “The labor market is a good example of why people are frustrated.”
Fewer layoffs accompany a rise in job openings
September layoffs fell to their lowest level in 18 months, according to the BLS. Separately, outplacement firm Challenger, Gray & Christmas counted just under 44,000 layoffs in October, down 71% from a year earlier.
The bureau’s September job openings data also pointed to firmer demand for workers. Vacancies increased by 333,000 from August to 7.52 million, exceeding the Dow Jones consensus forecast of 7.15 million.
Hiring and voluntary departures also rose in September, the BLS reported in its monthly Job Openings and Labor Turnover Survey released on November 3, 2026.
Federal Reserve holds rates as Nasdaq enters correction
The Federal Reserve left interest rates unchanged in October after raising them in September to 3.75%–4%, citing inflation. September’s increase was its first since 2023, and economists expected another increase at the central bank’s December meeting.
Stocks faced a separate source of pressure as investors appeared concerned about spending on artificial intelligence. The technology-heavy Nasdaq briefly recovered on Wednesday before returning to correction territory on Thursday. A correction marks a decline of 10% from an index’s most recent peak.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
