STORY: The U.S. added 261,000 jobs in October, beating expectations and highlighting the resilience of the economy despite a series of aggressive interest rate hikes by the Federal Reserve meant to rein in soaring inflation.
The report from the U.S. Labor Department out Friday also revised September's job numbers up to some 315,000 new hires.
But the unemployment rate rose to 3.7% from 3.5%, and year-over-year wage gains came in at a slower pace than the month before.
While payroll employment stayed strong, the report showed weakness in its household survey, which includes agricultural workers and the self-employed.
But the main takeaway from the closely watched jobs report was that the labor market remains robust, says Steven Ricchiuto, U.S. chief economist at Mizuho Securities.
"The jobs report is a pretty healthy number. There's a lot of focus and attention being given to the much weaker household data that drives the unemployment rate. But I think we have to understand, and the markets will over time, that the payroll numbers are a much more robust set of data than are the household employment report. So where we have a very healthy gain in payroll employment and an upward revision to the month of September, the household version of the survey had a decline in employment, and that's kind of giving people a mixed read. But the reality is the payroll employment numbers themselves, which were very healthy, is the most important piece of data that we've gotten this morning.
The report comes two days after the Fed delivered its fourth 75-basis-point interest rate hike this year to tackle soaring consumer prices, and Fed Chair Jerome Powell said it was "very premature" to consider a pause in raising borrowing costs.
"What the Federal Reserve is doing will eventually bring about a break in the labor market. There will eventually be losses of jobs. There will eventually be a significant rise in the jobless rate. It is unavoidable. It is something that is going to happen. What we're really figuring out right now is how long is that going to take to manifest itself in terms of the economy? Is it something we're likely to see in the next one or two months? Or is it something that's going to take 6 to 9 months to be reflected in the data? That's really the question in this particular junction. The data is telling you that the labor market is not yet responding to the Fed rate hikes that have already been executed."
Record-high inflation and a possible recession potentially brought about by the Fed's efforts to rein it in have been top of mind for voters, with the U.S. midterm elections now just days away.