US Payrolls Jump 165,000 in October as Labor Market Tightens

US nonfarm payrolls grew by 165,000 in October, and the prior two months were revised sharply higher, according to Bureau of Labor Statistics data released today — the strongest signal yet that the labor market is solid and tightening after a stagnant stretch from April 2025 through February 2026.

September's gain was revised up by 31,000 to +60,000, and August's by 53,000 to +186,000. The six-month average gain, which smooths out month-to-month noise, accelerated to +83,000 jobs, and that acceleration has run all year after the low point in late 2025. Total nonfarm employment hit a record 159.29 million. In plain terms: hiring isn't just recovering — it's picking up speed.

Where are the jobs?

The gains are concentrated in services. The private-sector winners in October:

• Professional and business services: +70,000
• Healthcare: +55,000
• Transportation & warehousing: +25,000
• Manufacturing: +19,000
• Financial activities, including real estate: +7,000
• Other services and retail trade: +6,000 each

Four industries lost ground: leisure and hospitality (-13,000), wholesale trade (-9,000), construction (-3,000 after a big prior-month gain), and information (-1,000). If you work in business services or healthcare, your market position just strengthened; in leisure and hospitality, it thinned.

The public sector tells a different story. The federal government has shed 328,000 jobs — 11% of its workforce — since January 2025, and state governments cut another 46,000 as public university enrollment declined. That's why the earlier flat patch existed: private hiring barely filled the holes left by government cuts.

What about pay?

Average hourly earnings jumped 0.37% month over month, the biggest gain in 11 months, and September's figure was revised higher. The three-month annualized gain hit 3.9%, also an 11-month high, and year-over-year earnings rose 3.1%. The catch: CPI inflation ran at 3.7% year over year in September and has outrun earnings for several months this year — a gap Americans have noticed, and expressed at the voting booth.

Who's in the labor force?

The labor force grew by 421,000 people in October to 170.68 million, the third straight big monthly increase, totaling 1.59 million, as more people got drawn into the market. That follows a drop of 2.07 million earlier this year, driven by the immigration crackdown and boomer retirements. Even so, the unemployment rate edged down to 4.14% — historically low within a 50-year window — with 7.07 million people actively looking for work.

The prime-age labor force participation rate, covering workers aged 25 to 54, held at 83.7%, and the three-month average rose to 83.6%. That range is the highest since the Dotcom Bubble burst more than 24 years ago. Strip out retirements, and people in their core working years are on the job or looking at near-record rates.

Today's report lines up with other recent data: initial unemployment insurance applications just fell to their lowest level since 1969, and JOLTS figures this week showed a big jump in quits and openings as workers regained confidence and moved to better jobs. For job seekers, the trend points to a market where leverage is quietly shifting back toward the employed.