America added 165,000 jobs in October, and the bond market heard a December rate rise

Nonfarm payrolls rose 165,000 in October, the Bureau of Labor Statistics reported on Friday. Economists had expected about 65,000. The unemployment rate fell to 4.1% from 4.2%, with 7.1 million Americans counted as out of work.

The revisions did as much work as the headline. August and September were revised up by a combined 84,000. September's figure read 29,000 when it was published, and it no longer looks like the start of a stall.

Pay rose slowly. Average hourly earnings grew 0.4% over the month and 3.1% over the year. Health care and social assistance employers took on about 55,000 people, the most in six months.

Chart: US employers added 165,000 jobs in October. Jobs added or lost in the US each month, January 2022 to October 2026, as revised. September, first reported at 29,000, now stands at 60,000. — This story’s chart of the day: the numbers, the dark version and the animated version are on its own page. The chart’s page →

Bond markets moved first. The two-year Treasury yield, which tracks rate expectations most closely, rose to 4.52%. Futures now put the odds of a quarter-point Federal Reserve rise in December at about 78%, from 70% before the figures landed.

The verdict

inflation is the last thing standing in the way. October consumer prices arrive on Tuesday in Washington, and I'd want to see the core reading before treating next month's rise as settled.

This story ran in Too Many Jobs Saturday 7 November’s edition, with the market snapshot, the other two stories, the numbers and the week ahead. Read the whole edition →

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Wednesday 11 November October's inflation report put a half-point rate rise back on the table
Wednesday 4 November The Reserve Bank of Australia raised rates to a level Australians have not seen since 2008
Friday 30 October The US economy grew 3.4% last quarter, but September's spending went on higher prices

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