U.S. employers added 165,000 jobs in October, well above the 65,000 forecast, and unemployment fell to 4.1%, the Bureau of Labor Statistics reported November 6. Average hourly earnings rose 0.4% to $38.00. A day earlier, BLS data showed third-quarter unit labor costs fell 0.7% as productivity rose 3.6%.

Key Takeaways

• Nonfarm payrolls rose 165,000 in October, against a Briefing.com consensus of 65,000 and a 48,000 monthly average over the prior 12 months.
• The unemployment rate fell to 4.1% from 4.2% in September.
• Average hourly earnings rose 14 cents, or 0.4%, to $38.00 and were up 3.1% from a year earlier, above the 2.9% economists expected.
• August payrolls were revised up to 186,000 from 133,000, and September to 60,000 from 29,000.
• Nonfarm business productivity rose 3.6% in the third quarter while unit labor costs fell 0.7%, both at annual rates.
• Consumer prices rose 3.7% in the 12 months through September, and October CPI is due November 10.

October Payrolls Beat Forecasts by 100,000 Jobs

The October jobs report broke a run of soft readings. Payrolls rose 165,000, roughly 100,000 more than the 65,000 Briefing.com consensus and more than three times the 48,000 average monthly gain of the prior year. The unemployment rate slipped to 4.1% from 4.2%, where forecasters expected it to stay.

For employers, the headline matters less than what sits underneath it: where the hiring happened, what it cost, and whether the output those workers produce is keeping pace with their pay.

Hiring Concentrated in Professional Services, Health Care and Delivery

Professional and business services led October hiring with 70,000 jobs, far above the sector’s 15,000 monthly average over the past year and a gain not matched since July 2022. The increases came in professional, scientific, and technical services, administrative and support services, and management of companies.

Health care added 42,000 jobs, above its 31,000 average, with hospitals adding 16,000, home health care 11,000, and outpatient care centers 5,000. Transportation and warehousing added 25,000, driven by couriers and messengers, and manufacturing added 19,000. Construction, retail, financial activities, and government were largely unchanged.

That mix matters for small businesses. Gains in administrative support, delivery, and professional services suggest more competition for office staff and couriers heading into the holiday season, when many firms add seasonal help.

Wage Growth Picked Up in October

Average hourly earnings for private-sector employees rose 14 cents, or 0.4%, to $38.00 in October. That beat the 0.3% consensus and marked a monthly pace not seen since November 2025. Over 12 months, pay rose 3.1%, above the 2.9% forecast.

Frontline pay moved by the same proportion. Earnings for private-sector production and nonsupervisory workers rose 12 cents, or 0.4%, to $32.75 an hour. For businesses with large hourly workforces, that figure is closer to their actual payroll costs than the all-employee average.

Productivity Gains Are Absorbing Higher Pay

Rising wages do not automatically mean rising labor costs per unit of output. That depends on productivity, and the most recent reading points in a favorable direction for employers.

Output Rose While Hours Barely Moved

BLS reported on November 5 that nonfarm business productivity rose at a 3.6% annual rate in the third quarter, well above the 2.8% economists expected. Output grew 3.7% while hours worked rose just 0.1%, meaning businesses produced more with nearly the same amount of labor time.

What the Two Reports Mean for Employer Costs

Unit labor costs, the hourly compensation needed to produce one unit of output, fell 0.7% in the third quarter. Economists had expected a 0.6% increase. The two reports cover different periods, with productivity through September and wages through October, so they cannot be combined into a single calculation. Read together, though, they suggest that higher pay has so far been offset by more output per hour, which gives employers more room on pricing and margins than wage data alone would imply.

Inflation Still Outpaces Pay Growth

For workers, the picture is less favorable. Average hourly earnings rose 3.1% over the 12 months through October, while consumer prices rose 3.7% over the 12 months through September, up from 3.4% in August. Core inflation, which excludes food and energy, stood at 2.6%.

Until the October CPI is released on November 10, a precise October comparison is not available. Based on September’s reading, pay growth trails headline inflation, a gap that affects consumer spending power and, in turn, demand for small business goods and services.

Revisions Show a Stronger Late Summer

The October report also changed the picture of the previous two months. August payrolls were revised to 186,000 from 133,000, and September rose to 60,000 from September’s initial reading of just 29,000 jobs. Combined, the two months are 84,000 jobs higher than first reported. For business owners who scaled back hiring plans after the September report, the revisions suggest the labor market was firmer than it looked at the time.

What Business Owners Should Watch Next

Three releases will shape the next read on labor costs and demand. The October CPI arrives November 10 and will show whether real wages narrowed the gap. The Federal Reserve holds its final 2026 policy meeting on December 9, after holding rates at 3.75% to 4% on October 28. The November jobs report follows on December 4.

FAQs

How Many Jobs Were Added in October 2026?

U.S. employers added 165,000 nonfarm jobs in October 2026, according to the Bureau of Labor Statistics. Economists had expected about 65,000.

What Is the Unemployment Rate for October 2026?

The unemployment rate fell to 4.1% in October 2026 from 4.2% in September.

How Much Did Wages Rise in October 2026?

Average hourly earnings rose 14 cents, or 0.4%, to $38.00 in October. Over the past 12 months, wages rose 3.1%.

When Is the Next Jobs Report?

The November 2026 jobs report is scheduled for Friday, December 4, at 8:30 a.m. Eastern Time.