WASHINGTON — US employers added 165,000 jobs in October, far more than forecast, and the unemployment rate fell to 4.1 percent, the Bureau of Labor Statistics reported Friday.
Far above forecasts
Economists polled by The Wall Street Journal had expected 59,000 jobs and an unemployment rate holding at 4.2 percent. Private employers added 159,000 positions. Government payrolls grew by 6,000.
The labor force participation rate rose to 61.9 percent. The underemployment rate, which counts people working part time who want full time hours, rose to 7.9 percent against a forecast of 7.6 percent.
Revisions changed the picture
The agency revised the two previous months upward, adding a net 84,000 jobs. August is now estimated at 186,000 and September at 60,000, up from earlier readings of 133,000 and 29,000.
The three-month average stands at 137,000, a healthier pace than the near-stall readings of late summer. Real average hourly earnings fell in September, and pay has lagged prices for most of the year.
Politics and the Fed
The report lands four days after Democrats won the House and the Senate. Voters told pollsters that prices, not unemployment, drove their decisions. Grocery bills and rent have outpaced wages, and the midterm result was read in part as a verdict on that.
Federal Reserve officials held rates steady at their last meeting and have signaled a possible move in December. A firm labor market with falling unemployment argues against cutting. Weak real wages argue for it. Policymakers will weigh both when they meet.
Economists caution that one month does not make a trend. Job openings, hours worked and hiring surveys will matter more than the headline number. Still, an October gain nearly three times the forecast removes the weakest argument for an emergency cut.
For households, the practical reading is narrower. More people are working, and the unemployment rate is low by historical standards. Whether that translates into easier bills depends on whether wage growth catches up with prices, which the September data did not show.