U.S. adds 165,000 jobs in October as traders increase Fed hike bets

The Bureau of Labor Statistics reported on November 6 that U.S. nonfarm payrolls—the count of jobs outside agriculture—rose by 165,000 in October. Unemployment fell from 4.2% to 4.1%, and September's job gain was revised upward to 60,000. Most reports cited an economist forecast of 59,000; another cited 70,000, both well below the result.^[1][2][3]

Average hourly wage growth accelerated to 0.4% from the previous month. The improvement was uneven, however: average unemployment duration rose to 27.1 weeks, and about 2 million people had been unemployed for at least 27 weeks, representing 27.6% of all unemployed workers.^[3][4]

More jobs and rising wages help sustain household income and spending, reducing the risk of a sharp demand slowdown for consumer businesses. Faster wage growth can also lift employers' costs, while resilient hiring gives the Fed more room to address inflation linked to the Middle East conflict. Traders increased their bets on a rate hike after the report.^[1][3][5][6]

The two-year Treasury yield rose from 4.46% in the previous session to 4.51%, while the ten-year yield increased from 4.84% to 4.86%. Treasury yields help set borrowing costs and provide a benchmark for stock valuations: higher yields can make loans more expensive and reduce what investors will pay today for future profits. A rate increase remains conditional; coverage identified inflation data and financial-market conditions as factors in December's decision.^[7]

Impact

What to watch next

• November 10: October consumer price index (CPI). Core CPI, which excludes food and energy, is forecast to rise 0.2% month over month after 0.3%. Less cooling than expected would strengthen the report's case for higher rates.
• November 12: Initial jobless claims for the week ending November 7 are forecast at 191,000, versus 189,000 previously. The result will show whether layoffs remained low after October.