The US economy added 165,000 jobs in October, far exceeding Wall Street’s 65,000 forecast and the revised September figure of 60,000. The three‑month average rose to 137,000, up from 28,000 previously, while unemployment slipped to 4.1%. Professional services drove gains, with 70,000 new positions, followed by strong growth in healthcare, transportation, warehousing, and manufacturing. Traders initially reacted to the robust data, pushing Treasury yields and the dollar higher, but markets quickly stabilised. Economists said the strong hiring report heightens expectations for a Federal Reserve rate hike in December, despite the central bank’s pause. Fed chair Kevin Warsh noted solid employment conditions, while the White House praised the “runaway job growth.” US stocks opened higher after a recent AI sell‑off, with the S&P 500 up 0.3% and Nasdaq up 1.6%.
The jobs surge follows the Democrats’ midterm election victory, which handed Congress to the party and challenged President Donald Trump’s economic narrative. Trump had campaigned on strong GDP growth and low unemployment, yet voters reported feeling inflation pressures from the Iran war. The White House quickly hailed the report, calling it a sign of a thriving job market. Kevin Hassett, director of the National Economic Council, described it as “runaway job growth” and “as good a job market as you’re likely to see.”
Economists now see a December Fed rate increase as nearly certain, citing the robust hiring data and persistent inflation. Annual personal consumption expenditures inflation rose 3.6% in September, well above the Fed’s 2% target. The Fed’s focus remains on curbing price growth, driven by the AI boom and the Iran conflict. After a sharp sell‑off in AI stocks post‑election, US equities stabilised on Friday, with the S&P 500 and Nasdaq 100 both opening higher.
Key details: 165,000 jobs added in October, unemployment 4.1%, professional services +70,000, Treasury yields +0.06pp, S&P 500 +0.3%, Nasdaq +1.6%.
Source: Financial Times Markets · Summarized by HeadlinesBriefing