U.S. employers added a surprising 165,000 jobs in October; unemployment rate dipped to 4.1%
WASHINGTON — U.S. employers created a surprising 165,000 new jobs last month and the unemployment rate dipped to 4.1%.
The hiring was far stronger than the 65,000 new jobs that economists had expected.
The jobs report comes three days after voters delivered a stunning defeat to President Donald Trump and his Republican Party in midterm elections. Frustrated with the state of the economy — and especially the high cost of living — Americans handed full control of the U.S. Congress to the Democrats.
Labor Department revisions added 84,000 new jobs in August and September.
The unemployment rate fell even though 421,000 people entered the labor force.
But hourly wages rose a meager 3.1% from October 2025, with many families struggling to keep up with inflation.
Professional and business services — a broad category of administrative and managerial workers — added 70,000. Healthcare companies hired nearly 42,000. Factories added 19,000 jobs. But hotels, restaurants and bars cut 10,600.
The jobs report arrives three days after voters handed a stunning defeat to President Donald Trump and his Republican Party in midterm elections. Frustrated with the state of the economy — and especially the high cost of living — Americans handed full control of the U.S. Congress to the Democrats.
Yet the American economy and job market have proven resilient in the face of a series of shocks — Trump’s double-digit taxes on imports and the war with Iran, which has driven U.S. gasoline prices above $4 a gallon and pinched family budgets.
Gross domestic product — the nation’s output of goods and services — advanced at a sprightly 3.4% annual pace from July through September, lifted by strong consumer spending and booming investment in artificial intelligence.
The job market has been solid but unspectacular.
So far this year, employers — companies, government agencies and nonprofits — have added an average of 68,000 jobs a month, including a disappointing 29,000 last month. That is modest by historic standards but an improvement over 2025 when monthly job creation averaged 9,700. That was the weakest performance outside of a recession since 2002. Last year, high interest rates and President Donald Trump’s unpredictable trade policies discouraged hiring.
Despite recovering this year, hiring remains well below the average of 166,000 monthly jobs created in 2023 and 2024, let alone the 491,000 a month recorded during the 2021-2022 hiring boom that followed COVID-19 lockdowns.
Economists see a “low-fire, low-hire’’ environment in which employers are reluctant to let go of existing workers but aren’t in any hurry to hire new ones. Young people entering the workforce, or those who’ve lost their jobs, can struggle to find work.
The United States doesn’t need as many new jobs as it once did to keep the unemployment rate from rising. That is because baby boomer retirements and Trump’s immigration crackdown mean fewer people are competing for work.
In late 2023, the so-called break-even point was around 166,000 new jobs a month. It’s now just over 5,000, according to an estimate by Yale University’s Budget Lab, which drew on an earlier Federal Reserve report.
Meanwhile, rising prices have pinched pay for millions of Americans. After taking inflation into account, average hourly earnings fell 0.7% in September — the sixth straight year-over-year drop and one explanation for voters’ fury at the polls Tuesday.
