Jobs report shows hiring accelerated in October
The jobs report is the first major economic data release since the midterms.
A jobs report on Friday showed hiring accelerated in October, providing the first major snapshot of the economy since the midterms as the stock market seesaws in response to the election results.
Employers added 165,000 jobs in October, an increase from 60,000 jobs added a month earlier, U.S. Bureau of Labor Statistics data showed. The unemployment rate ticked down from 4.2% to 4.1%.
The reading for October came in much higher than economists' expectation of 59,000 jobs added.
The report included upward revisions totaling an extra 84,000 jobs added in August and September, meaning the labor market had been stronger in those months than previously thought.
The labor market is growing at a fairly robust clip, though performance from one month to the next has fluctuated significantly.
Hiring in October came in well above an average of 48,000 jobs added each month over the previous 12 months, the BLS said.
Employment increased the most in professional and business services, health care, and transportation and warehousing, according to the BLS.
Stock futures were mixed in pre-market trading on Friday morning in the minutes after the data release.
The Dow Jones Industrial Average recorded its best performance in more than a year on Wednesday, just a day after the midterm elections. A selloff on Thursday wiped out all of those gains, however, as investors appeared to digest risk for the tech industry posed by newly empowered Democrats.
The fresh jobs data, meanwhile, arrived at a delicate moment for the Federal Reserve, where policymakers are weighing a rate increase that could help tackle inflation but risks a slowdown in hiring.
The annual inflation rate stands at 3.7% as of September, the most recent month on record, putting inflation more than a percentage point above the Fed's target rate of 2%.
The Iran war drove up gasoline prices and catapulted inflation to a three-year high in May. Inflation eased over the summer, but continued unrest has kept price increases well above pre-war levels.
The combination of elevated inflation and a resilient labor market prompted the Fed to raise interest rates a quarter of a percentage point in September. It marked the Fed's first rate hike since 2023.
That rate increase intends to help cool off inflation by slowing the economy and eating away at demand, though such a policy move typically yields results after a lag time lasting several months.
Policymakers may lose patience as they weigh whether the current level of interest rates is high enough to ease price hikes. The odds of a quarter-point rate hike at the Fed's next meeting in December are pegged at about 74%, according to CME Group's FedWatch Tool, a measure of market sentiment.