U.S. employers add 165,000 jobs in October as unemployment dips

U.S. employers added 165,000 jobs in October, far more than economists expected, as hiring accelerated and the unemployment rate fell to 4.1%, the Labor Department reported Friday.

The job gain exceeded the 65,000 forecast by economists polled by FactSet, according to CBS News. The unemployment rate was down from 4.2% in September. The Labor Department also revised its estimates for August and September upward by a combined 84,000 jobs, showing that hiring in those months was stronger than initially reported.

The figures mark an improvement after a sluggish stretch. Employers added an average of just 10,000 jobs a month earlier in 2025, CBS News reported. But the gains were uneven across industries. Health care, manufacturing and business services added jobs in October, while restaurants and construction companies cut positions, according to NPR.

Pay rose somewhat faster, though wages continued to lag inflation. Average wages were up 3.1% from a year earlier, a larger annual increase than in the previous month, NPR reported. Inflation reached 3.7% in September. NPR reported that living costs have risen faster than wages for much of the year after the war with Iran triggered a sharp increase in energy prices.

“Workers are losing ground right now,” Cory Stahle, an economist with the Indeed job-search website, told NPR. “The longer it wears on, the more and more they’re going to feel that.”

The stronger hiring figures do not mean every job seeker will find work easily. Speaking at a New York conference on Wednesday, before the report was released, Ryan Sweet, chief global economist at Oxford Economics, described a labor market that remained healthy overall despite difficulties for some applicants.

“All signs point to a solid labor market, even if it is difficult for pockets of workers,” Sweet said, according to CBS News.

The combination of hiring gains and persistent price pressures comes as the Federal Reserve weighs its next move on interest rates. NPR reported that the historically low unemployment rate has allowed the central bank to focus on inflation. The Fed held its benchmark rate steady last week, but investors expect policymakers to raise it when they meet in December.

High prices have also been a political concern. Voter frustration over costs was a major factor in the midterm elections, in which Republicans lost their majorities in both the House and Senate, NPR reported. October’s report shows employers adding workers at a faster pace, even as rising prices continue to strain paychecks.