U.S. Payrolls Rose 165,000 in October. Outside Health Care, Employers Have Added 366,000 Jobs in a Year, the Most Since January 2025.

U.S. employers added 165,000 jobs in October, almost three times the 59,000 economists had expected, and the unemployment rate slipped to 4.1 per cent from 4.2 per cent, the Bureau of Labor Statistics said on Friday. The bureau also revised August up to 186,000 and September up to 60,000, adding 84,000 jobs to what it had reported before.

The headline number is strong. The revisions do something more useful. They change the shape of the past year. On 4 October, working from the data published then, we reported that health care and social assistance had added more jobs over 12 months than the U.S. economy as a whole for 16 months in a row. With Friday's figures, that is no longer true for August or September, and it is plainly untrue for October.

How many jobs has the rest of the economy added?

By our arithmetic, 366,000 in the 12 months to October. Total nonfarm employment rose from 158.41 million in October 2025 to 159.29 million in October 2026, a gain of 885,000, according to the bureau's Table B-1. Health care and social assistance went from 23.49 million to 24.00 million, a gain of 519,000. Everything else, from factories to banks to the federal government, gained the difference.

That is the largest 12-month gain outside the sector since January 2025, when it was 371,000. A year ago the same calculation gave a loss of 268,000.

We redid the rolling comparison for every month since mid-2024, using the payroll levels now published. The test is simple: in each month, was the sector's 12-month gain bigger than the economy's?

Twelve-month job gains, total and outside health care and social assistance (thousands, this publication's arithmetic from BLS payroll data as revised on 6 November 2026)

The run began in June 2025 and, on current data, ended in July 2026, 14 months. Our earlier count of 16 relied on August and September figures that have since been revised up. The September comparison we published then showed 496,000 jobs for the whole economy against 520,000 for the sector. It now reads 580,000 against 511,000.

That caveat matters. The sector supplied 519,000 of 885,000 net new jobs, or 59 per cent, by our arithmetic. It accounts for about 15 per cent of payroll employment.

Which industries added and lost jobs over the year?

The growth is wider than it was, and still lopsided. In October alone, professional and business services added 70,000 jobs and health care 42,000, according to the release. Transportation and warehousing added 25,000, led by couriers and messengers, and manufacturing 19,000.

Change in payroll employment by industry, October 2025 to October 2026 (thousands, seasonally adjusted, this publication's arithmetic from BLS Table B-1)

Rows do not sum to the total because smaller industries and state and local government are left out. Two things stand out. Professional and business services, which includes temporary help agencies, has recovered 269,000 jobs since what the bureau called an October 2025 low. And three industries are still shrinking over the year: information, finance and the federal government. Federal employment is 333,000 lower than in January 2025, by our arithmetic from the same series.

Who is still left out?

People who lost a job some time ago. About 2.0 million Americans had been unemployed for 27 weeks or more in October, 27.6 per cent of everyone unemployed, the release shows. In the bureau's monthly series, the last time the share was that high was December 2021, when it stood at 31.2 per cent and the economy was still working through the pandemic.

Cory Stahle, a senior economist at the hiring site Indeed, told CNBC that the series "can be noisy from month to month" but that "if you look over a longer time horizon, there is no mistake in the trend." He added: "Now, the average unemployed person takes longer to find a job than their benefits would last." Workers generally lose most government unemployment benefits after 26 weeks, CNBC noted.

There is a second soft spot. The number of people working part time because they could not find full-time work, or because their hours were cut, rose by 339,000 to 4.8 million. The participation rate, 61.9 per cent, has changed little since January. The employment-population ratio, 59.3 per cent, has barely moved either. The unemployment rate for Black workers was 6.6 per cent, against 3.7 per cent for white workers, and the teenage rate was 13.9 per cent. So the drop in unemployment did not come from a surge of people back into work. It came from a labour market that hires steadily but slowly, and keeps the people it has.

Pay is the other half of the story. Average hourly earnings rose 14 cents in October to $38.00, up 3.1 per cent on a year earlier. Consumer prices rose 3.7 per cent in the year to September, according to the bureau's latest price index. Wages are still losing ground to prices, as they were in the last quarterly cost data.

What does it mean for interest rates?

It strengthens the case for a December rate increase. The Federal Reserve raised rates in September and held its target range at 3.75 to 4 per cent on 28 October, when two officials voted to raise it. After Friday's report, futures traders put the probability of a quarter-point increase at the 8 and 9 December meeting at 76.8 per cent, according to the CME FedWatch tool as reported by InvestmentNews. The two-year Treasury yield rose nearly 5 basis points to 4.52 per cent.

A rate committee that is worried about inflation reads a strong payroll number and a falling jobless rate one way. The long-term unemployment figures do not change that reading much, because the Fed's mandate concerns the labour market as a whole, not one group in it. That is our reading, not the Fed's.

What to watch next

Three dates. October's consumer price data comes next, and with it a test of whether prices are still outrunning the 3.1 per cent wage gain. The November jobs report lands in early December, days before the Fed meets on 8 and 9 December. Then, in February, the bureau publishes its annual benchmark revision, which resets the payroll levels for the past two years. The rolling comparison above will be redone on those figures, and the 14 months could change again.

Payroll, unemployment, duration, part-time and earnings figures, and the August and September revisions, are from the Bureau of Labor Statistics Employment Situation release for October 2026, published 6 November 2026, and its Table B-1. Monthly payroll levels back to 2024 and the long-term unemployment share history are from the BLS Current Employment Statistics and Current Population Survey series as published on the Federal Reserve Bank of St. Louis FRED database, retrieved 9 November 2026. The Dow Jones consensus, CME FedWatch probability and Treasury yields are from InvestmentNews (6 November 2026). The Indeed quote is from CNBC (6 November 2026). The Federal Reserve's 28 October decision is from its FOMC statement. Twelve-month changes, the industry table, the rolling comparison with health care and social assistance and the shares are this publication's arithmetic. The analysis is our own.

Topics businessjobs reportlabor marketemploymentBureau of Labor Statisticshealth careFederal Reserve