New data released on Friday revealed the US added 165,000 jobs in October, surpassing economist expectations and signaling continued strength in the labor market. The unemployment rate edged down to 4.1%, while average hourly earnings rose by 3.1% annually, slightly higher than the previous month. This growth comes amid persistent inflation and ongoing conflicts in the Middle East, which have kept economic uncertainty high.
The report also showed revisions to earlier months' job figures, with August and September data adjusted upward by a combined 84,000 jobs. Sectors such as healthcare, transportation, and manufacturing saw notable job gains. Meanwhile, layoffs in September reached their lowest level in over a year and a half, with October's figures showing a 71% drop compared to the previous year.
The data follows a pivotal midterm election that reinforced Democratic control of Congress. Polls indicated widespread frustration over rising living costs, particularly gas and grocery prices. Heather Long, chief economist at Navy Federal Credit Union, noted that the labor market reflects the broader economic strain on households. However, relief remains uncertain as inflation continues to rise, driven by factors like the war in Iran and increased diesel prices.
The Federal Reserve has been actively addressing inflation through rate hikes, raising interest rates to 3.75%-4% in September. While rates were held steady in October, economists anticipate another increase in December. Meanwhile, financial markets have been volatile, with concerns over AI spending contributing to recent fluctuations in tech stocks.