Macro
Payrolls Jump 165,000 in October as Unemployment Falls to 4.1% and December Fed Hike Bets Rise
Hiring far exceeded the 65,000 forecast, September was revised higher, and Treasury yields and the dollar rose as traders raised the odds of a rate increase next month.
By Emma Cruz ·
US employers added far more jobs than forecast in October, a result that pushed Treasury yields and the dollar higher and strengthened market expectations that the Federal Reserve will raise interest rates in December.
Nonfarm payrolls rose by 165,000 last month, well above the 65,000 economists had expected, Reuters reported on Friday [1]. CoinDesk, which tracked the release live, put the consensus forecast at the same 65,000 level [2]. The gain for September was revised up to 60,000 from 29,000, so the labor market looks somewhat stronger over the past two months than it did a week ago [1].
The unemployment rate edged down to 4.1% from 4.2% in September, according to Reuters [1]. CoinDesk noted that the decline was larger than economists had anticipated, since the forecast had called for the rate to hold at 4.2% [2]. Average hourly earnings rose 3.1% from a year earlier, Reuters said, and because inflation is running above that pace, real hourly earnings fell. Brian Jacobsen of Annex Wealth Management called it "the affordability crisis in one stat" [1].
Bond and currency markets moved quickly after the 8:30 a.m. ET release. By CoinDesk's 8:34 a.m. update, the 10-year Treasury yield had risen 6.4 basis points to 4.894% [2]. Later in the morning Reuters showed the 2-year yield at 4.52%, the 10-year at 4.87% and the 30-year at 5.27%, after an initial spike that partly faded. The dollar index rose 0.7% to 102.22 [1].
The more consequential shift was in rate expectations. Reuters reported that market bets on a Fed hike next month climbed to 78% from 70% [1]. CoinDesk described a similar swing, with the probability near 70% before the data and 77% by 9:53 a.m. ET, though it noted the odds had been around 95% a few weeks ago, so the report restored some of the confidence that had drained out of the market [2]. Reuters said the data gives the Fed more room to focus on inflation linked to the Middle East conflict [1].
Analysts quoted by Reuters largely read the data as hawkish. Susannah Streeter of Wealth Club said the numbers strengthen "the argument for keeping rates higher for longer" [1]. Reuters added that several analysts now expect a December increase, while some are debating whether it would be 25 or 50 basis points, and at least one noted that the recent bout of stock-market volatility could make the central bank hesitate [1].
Equities did not react uniformly. In Reuters' report the Nasdaq was up 1.7% and the S&P 500 up 0.6%, while the Dow Jones Industrial Average was down 0.6%, a split that followed Thursday's heavy technology selloff [1]. CoinDesk observed that the Nasdaq's early gain of about 2% had narrowed to 1.3% by 11:23 a.m. ET [2].
The report matters for several reasons. A stronger labor market reduces the argument that the Fed needs to protect growth, and higher yields can weigh on richly valued shares, particularly in the technology sector that has just been through a sharp drawdown.
Next on the calendar are the next consumer price inflation reading and the Fed's December policy meeting, where officials will weigh a resilient jobs market against an unsettled equity backdrop. Traders will also watch whether the October figures are revised again, since September's change shows how much the first estimates can move. For now, the data have shifted the debate from whether the Fed hikes to how large the move might be.
Sources:
[1] Reuters, "Strong October jobs report sends yields higher", November 6, 2026. https://finance.yahoo.com/economy/policy/articles/strong-october-jobs-report-sends-134858909.html
[2] CoinDesk, "Live updates: Bitcoin holds in narrow range, stocks bounce after strong October jobs report", November 6, 2026. https://www.coindesk.com/tech/2026/11/06/live-updates-nasdaq-100-futures-rally-points-to-stock-market-respite
This article was produced with AI assistance. It is for informational purposes only and is not financial advice. StockVolt and its authors may hold positions in securities mentioned.