US job growth accelerated throughout October, pushing the unemployment rate down to 4.1%. This suggests the labor market is regaining momentum after a mid-summer slump, keeping the rate hike in December.
The Labor Department’s employment report, released Friday, also revealed that the <a The labor market is heating up across-the-board and supports our view that the Fed will raise the policy rate again in December," said Kathy Bostjancic, chief economist at Nationwide.
Nonfarm payrolls grew by 165,000 last month, following an upwardly revised gain of 60,000 in September, according to the Bureau of Labor Statistics. Economists surveyed by Reuters had projected a payroll increase of 65,000, following a previously reported gain of 29,000 in September.
Estimates ranged from 35,000 to 125,000 jobs. August’s employment gains were revised upward to 186,000 from the initial estimate of 133,000. Employment growth averaged 137,000 over the past three months, compared to an average loss of 45,000 during the same period in 2025. Some economists remained skeptical regarding the labor market’s newfound strength.
“Recent improvements in the employment situation largely relate to a major jump in federal government spending in the third quarter, as well as an unprecedented surge in election spending reported to be near $12 billion within a relatively short time frame of August to October,” said Brian Bethune, an economics professor at Boston College.
Last month’s broad-based payroll expansion was driven by the professional and business services sector, which added 70,000 jobs—significantly higher than the 15,000 average monthly gain seen over the previous 12 months. These positions were concentrated in professional, scientific, and technical services, as well as administrative, support, waste management, and remediation services.
Healthcare employment rose by 42,000, primarily within hospitals and home healthcare services. The transportation and warehousing sector contributed 25,000 positions, mostly involving couriers and messengers, which aligns with robust domestic demand.
