Jobs Jump in October, With Unemployment Dipping Slightly

A day after the stock market hit the skids big-time, there was good news on the employment front. U.S. employers hired at a vigorous pace in October, adding 165,000 jobs, way above the 65,000 forecast, while the unemployment rate lowered slightly to 4.1% from 4.2%.

The report from the U.S. Bureau of Labor Statistics shows that employers are continuing to hire workers even with the Iran War raising energy prices, tariffs a continual worry and the uncertainty of how AI will affect businesses on many levels.

The total nonfarm payroll rise of 165,000 jobs is higher than the average monthly gain of 48,000 over the prior 12 months. In October, employment increased in professional and business services, in healthcare and in transportation and warehousing.

“Today’s report was impressive,” said Realtor.com® Senior Economist Jake Krimmel. “Coming in, we would have been happy with the forecasted 65,000, more than double last month’s. Instead we got more than double. Revisions added another 84,000 jobs to August and September, lifting the three-month average to 137,000 from about 51,000 a month ago.

“This is still a low hire, low fire market overall, but we could be seeing some green shoots on the hiring side. The numbers could still be revised, of course, and the trend matters more than any one point; but you don’t get a good trend without a good month.”

The report might be a welcome sign for the broader economy one day after stocks plummeted, with AI-centric companies hit hardest. For housing markets, though, the stability comes with a caveat—inflation is likely more of a primary concern for policymakers.

Krimmel noted that for the Fed, the report clears the way for a rate hike, because a soft jobs report was the one thing that could have complicated December.

“If Fed hawks were waiting to exhale, they can do so now,” he said. “One question that keeps coming up is whether the midterms changed anything for the housing market. In the short run, not much—the Iran War and its impact on inflation and mortgage rates remain the major wildcard. Getting back to ‘normal’ in many metros takes more activity, which depends on improved buying power to bring buyers off the sidelines.”

Krimmel noted that mortgage rates have declined for three straight weeks after a massive 74 basis point surge from late August to mid-October, but wages are the other half of buying power.