Following a period of subdued growth, the US labour market recorded surprisingly dynamic momentum in October. According to figures from the Bureau of Labor Statistics, 165,000 non-farm payroll jobs were created in the United States last month. The result comfortably exceeded the expectations of Dow Jones analysts, who had previously forecast an increase of just 59,000 jobs.
At the same time, the figure for the previous month was revised upwards. While only 29,000 new jobs were initially reported for September, the revised statistics showed a gain of 60,000 jobs, representing an increase of 31,000 jobs compared to the earlier estimate. In parallel, the unemployment rate edged down slightly in October to 4.1 per cent. The number of initial jobless claims stood at 189,000, continuing to hover near historic lows dating back to 1969.
Signalling effect for Federal Reserve interest rate policy
The robust labour market situation provides the Federal Reserve with additional clarity in pursuing its dual mandate, which aims at price stability and full employment. With employment conditions demonstrating resilience, the US central bank can focus primarily on curbing inflation. This continues to weigh on the broader economy in light of rising oil prices, trade tariffs and persistent price pressures.
Last week, the Federal Reserve Open Market Committee decided by a vote of 10 to 2 to leave the benchmark interest rate unchanged in the range of 3.75 per cent to 4 per cent. The rate of inflation remains above the central bank target of 2 per cent. Drawing on statements by Chair Kevin Warsh, market observers anticipate that the central bank could raise interest rates at least once more before the end of the year.
Services and healthcare sector drive jobs growth
Job growth in October was unevenly distributed across individual sectors, with specialised services in particular making a significant contribution to the increase:
- —Professional and business services: 70,000 new jobs
- —Healthcare: 42,000 additional workers
- —Financial sector: 7,000 newly created positions
Despite the positive momentum in October, the broader trend remains subdued. From January 2025 to September 2026, monthly employment growth averaged just 35,000 jobs. Across the entire reporting period, according to data from CNBC, employment increased by more than 200,000 in only a single month, while seven months actually saw job losses.
