US employers add 165,000 jobs in October, but worrying joblessness trends remain: Here's what the latest numbers mean for you

Forecasters predicted the jobs market to only move forward last month. But jobs grew at a much faster rate, defeating all industry expectations. US employers added 165,000 jobs in October, the Bureau of Labor Statistics (BLS) said in its report on Friday, The unemployment rate came down to 4.1 percent, falling from 4.2 percent in September. Before the latest report, employers had added an average of about 68,000 jobs a month since the beginning of this year. Here's what the figures mean for your finances.

Hourly earnings hike below inflation

Private payrolls rose by 159,000 in October. Meanwhile, government payrolls increased by 6,000 jobs. The US federal government let go of a thousand roles last month. State governments added 8,000 jobs in October, while local governments shed 1,000 jobs during the same period.


According to the jobs report, average hourly earnings rose 3.1 percent year-over-year, significantly above the 2.4% rise predicted by economists polled by the LSEG group. However, the figure is meaningfully below the rate of inflation, which currently stands at 3.7 percent and is on the rise.

Earnings grew 0.4 percent on a monthly basis, higher than the 0.3 percent estimate given in the LSEG poll.

Impact on federal interest rates

The robust October jobs report has raised the odds of the US Federal Reserve hiking interest rates when it holds its next meeting in a month, during December 8-9.

The market's expectation for a 25-basis-point rate hike climbed Friday, with the CME FedWatch tool showing a roughly 77 percent chance the Fed will hike interest rates in December, marking an increase from 66.9 percent just a week ago. Such a hike would take federal funds rate to a target range of 4 to 4.25 percent.

Unemployment streak extends

But a distressing unemployment trend is hiding behind the numbers. The average jobless worker's bout of unemployment crossed 27 weeks in October on a seasonally adjusted basis, CNBC reported citing the BLS data.

That translates to a job hunt period of nearly seven months, the longest since 2016, except for the Covid pandemic. Nearly two million Americans have been without a job for at least 27 weeks, according to the BLS.