US employers added 165,000 jobs in October, far above forecasts, and the unemployment rate fell to 4.1%. The Bureau of Labor Statistics report, released Friday, 6 November, compared with a Dow Jones estimate of 59,000 and a Reuters poll of 65,000, CNBC and Reuters reported. Average hourly earnings rose 0.4% on the month, to $38.00, and 3.1% from a year earlier, against estimates of 0.3% and 2.9%. The workweek was unchanged at 34.4 hours. The preview, written before the print, is in Friday morning's economy note.
Hiring spread beyond healthcare
The gain was broad. Professional and business services added 70,000 jobs, healthcare 42,000, transportation and warehousing 25,000, and manufacturing 19,000, CNBC said. AARP's digest of the same release said leisure and hospitality, wholesale trade, and construction lost jobs. Revisions added 84,000 jobs to the prior two months: August rose by 53,000 to 186,000, and September rose by 31,000 to 60,000, from an initial 29,000.
The household survey was stronger on the headline and softer underneath. Unemployment edged down from 4.2% to 4.1%. The labor force grew by 421,000 and participation rose to 61.9%. Household employment rose by 463,000. The broader underemployment rate, which counts discouraged workers and people working part time for economic reasons, rose to 7.9%. Part-time work for economic reasons increased by 339,000 to 4.8 million, 24/7 Wall St. noted. Average unemployment duration jumped 2.3 weeks to 27.1 weeks, the highest since September 2021, and 1.96 million people had been out of work for more than 27 weeks.
December hike odds move back toward 77%
Rates traders treated the print as a reason to put a December hike back in the center of the distribution. CME FedWatch priced a quarter-point increase at the 8 to 9 December meeting at 76.8% on Friday, 24/7 Wall St. and InvestmentNews reported, up from about 67% on Thursday. Reuters had the probability near 78% after a brief spike to about 85% right after the release. A hike would take the federal funds target from 3.75% to 4% up to 4% to 4.25%. The Fed hiked on 16 September and held on 28 October in a 10-2 vote.
San Francisco Fed President Mary Daly said Friday the Fed will likely have to tighten further to bring inflation down, without giving a date or a size, and said she prefers a deliberate pace. She called the revaluation in technology stocks painful but measured. Fitch analyst Olu Sonola wrote that the labor market's resilience keeps the Fed focused on inflation. October CPI arrives Tuesday, 10 November, at 8:30 a.m. ET. The November jobs report follows on 4 December.
Stocks steadied on Friday. Crypto did not reclaim $80,000
Equities bounced off Thursday's washout without erasing it. CNBC said the Nasdaq Composite rose 1.09% to 24,579.42, the S&P 500 rose 0.31% to 7,376.86, and the Dow fell 237.33 points, or 0.46%, to 51,285.73. Thursday's 5.5% Nasdaq drop had put that index more than 10% under its recent high. Bitcoin held near $75,700 through the weekend, in the markets note. Gold finished near $4,070, in the commodities update. Follow the rates path on the economy desk.