US employers added 165,000 jobs in October, far more than economists had expected, and the unemployment rate fell to 4.1 per cent, the Bureau of Labor Statistics said on Friday 6 November.

Gains beat forecasts by a wide margin

Economists polled by Reuters had forecast a gain of 65,000 jobs, while the Dow Jones estimate cited by CNBC was 59,000, so the result came in more than double expectations. September's gain was revised up from 29,000 to 60,000, and August's was revised up from 133,000 to 186,000, adding a combined 84,000 jobs to the earlier estimates. The October gain was also well above the average monthly increase of 48,000 over the previous 12 months, according to the bureau.

Where the jobs came from

Professional and business services added 70,000 jobs, while health care and social assistance added about 55,000. Transportation and warehousing added 24,800 jobs and manufacturing added 19,000. Jobs were lost in leisure and hospitality, down 13,000, and in wholesale trade, down 9,100. Average hourly earnings rose 0.4 per cent in the month to $38.00, and were 3.1 per cent higher than a year earlier.

What it means for interest rates

The unemployment rate slipped from 4.2 per cent in September and has stayed in a narrow range of 4.1 to 4.3 per cent since March, the bureau said. About 7.1 million people were unemployed, and two million of them had been out of work for 27 weeks or more. The stronger-than-expected report gives the Federal Reserve more scope to focus on inflation, and the next jobs report is due on 4 December, days before the Fed meets.