U.S. continues to generate jobs, yet inflation is eroding Americans' spending power
Summary
U.S. employers added 165,000 jobs in October, and unemployment fell to 4.1%, while revisions increased August and September job totals by 84,000. Hourly wages rose 3.1% from a year earlier, leaving many workers with less purchasing power as inflation remained high and investors raised their expectations of a Federal Reserve rate increase in December.Key Facts
- October job growth of 165,000 exceeded economists’ forecast of 65,000.
- The unemployment rate fell to 4.1% even as 421,000 people entered the labor force.
- Average hourly wages rose 0.4% from September, their largest monthly increase since January, and 3.1% from October 2025.
- Professional and business services added 70,000 jobs, health care added nearly 42,000, and factories added 19,000; hotels, restaurants and bars lost 10,600 jobs.
- Employers added an average of 86,000 jobs per month so far in 2026, compared with 9,700 per month in 2025.
- Investors put the odds of a Federal Reserve rate increase in December at 77%, according to CME's FedWatch tool.
- An estimate from Yale University's Budget Lab put the current monthly job-growth level needed to keep unemployment from rising at just over 5,000.
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