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The U.S. economy added jobs at a strong pace in October, rebounding from a softer September amid economic uncertainty.
What are the findings of the October 2026 jobs report?
The Bureau of Labor Statistics on Friday reported that employers added 165,000 jobs in October. That figure was well above the 65,000 estimate of economists polled by LSEG.
The unemployment rate decreased slightly to 4.1%, which was lower than the expectations of economists who predicted it would hold steady at 4.2%.
Revisions were made to the payroll numbers for the prior two months, with August revised up by 53,000 from a gain of 133,000 jobs to 186,000 jobs; while the change for September was revised up by 31,000 jobs from a gain of 29,000 to 60,000.
Taken together, employment in August and September was 84,000 higher than previously reported.
What sectors added or lost the most jobs in October 2026?
Private payrolls grew by 159,000 jobs in October, well above the 64,000 expected by economists polled by LSEG.
Government payrolls increased by 6,000 jobs in October. The sector’s loss of 17,000 jobs in September was revised down to a loss of 18,000 jobs. The federal government shed 1,000 jobs in October, while state governments added 8,000 jobs and local governments cut 1,000 roles last month.
The manufacturing sector added 19,000 jobs in October, well above the gain of 5,000 that was predicted by economists polled by LSEG. September’s gain of 9,000 jobs was also revised up to 13,000. Professional and business services added 70,000 jobs in October, which was well above the average monthly gain of 15,000 jobs over the past 12 months. The sector’s job growth was led by gains in professional, scientific and technical services (+32,900), and in administrative and support and waste management and remediation services (+28,100).
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Healthcare added 41,600 jobs in October, above the average monthly gain of 31,000 over the last 12 months. Most of last month’s gains were in hospitals (+16,000), home healthcare services (+10,500) and outpatient care centers (+4,800).
Transportation and warehousing added 24,800 jobs last month, with growth occurring among couriers and messengers (+17,400) and air transportation (+3,500).
Private payrolls grew by 159,000 in October, well above the expectations of a gain of 64,000 jobs. (Al Drago/Bloomberg via Getty Images)
PRIVATE SECTOR ADDED 86,000 JOBS IN OCTOBER, ABOVE EXPECTATIONS, ADP SAYS
What does the October 2026 jobs report mean for the workforce?
The number of long-term unemployed, defined as those who have been jobless for 27 weeks or more, was 2 million in October and changed little over the month. The long-term unemployed accounted for 27.6% of all unemployed people.
The number of people employed part-time for economic reasons rose by 339,000 to 4.8 million in October. These individuals would’ve preferred full-time work but were working part-time because their hours were reduced, or they were unable to find full-time jobs.
The labor force participation was 61.9% in October, while the employment-population ratio was 59.3%. Both of these figures were little changed in October and have shown little net change since January.
Average hourly earnings increased 3.1% year over year in October, above the 2.4% rise predicted by LSEG economists. Earnings also grew 0.4% on a monthly basis, above the 0.3% estimate in the LSEG poll.
FED’S PREFERRED INFLATION GAUGE ROSE IN SEPTEMBER AS THIRD-QUARTER GDP BEATS EXPECTATIONS
Federal Reserve Chair Kevin Warsh and central bank policymakers will hold their next interest rate meeting on December 8-9. (Daniel Heuer/Bloomberg via Getty Images)
What are experts saying about the October 2026 jobs report?
Seema Shah, chief global strategist at Principal Asset Management, said in a statement that the October jobs report “is a strong rebuttal to fears that the economy is heading into a meaningful slowdown.”
“Payrolls growth surprised firmly to the upside, unemployment fell back to 4.1%, and job creation remains broad-based, pointing to an economy that is still absorbing labor comfortably rather than one beginning to buckle under tighter financial conditions,” Shah said. “With wage growth also picking up, a December Fed hike remains firmly on the table despite the recent tightening in financial conditions.”
Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management, said that the October jobs report’s “payroll number removed the traffic light at the December intersection for the Fed.”
“Fed focus was already firmly on moderating inflation, and continued signs of tightening in the labor market give it a license to raise rates without hindering its employment mandate. Additional tightening is possible in the first quarter if inflation continues to print strong,” Rosner added.
What does it mean for interest rates?
The strong October jobs report raised the likelihood of the Federal Reserve hiking interest rates when it holds its next meeting on Dec. 8-9.
The market’s expectations of a 25-basis-point rate hike ticked up on Friday, with the CME FedWatch tool showing a 76.8% probability the Fed hikes in December – an increase from 66.9% a week ago. A hike of that size would take the federal funds rate to a target range of 4% to 4.25%.
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How did the market react?
The benchmark S&P 500 Index rose 0.65% during Friday morning’s trading session.
The Dow Jones Industrial Average slipped 0.2%, while the Nasdaq Composite rose 1.25%.