The U.S. added jobs in October, but risks stagnation

The U.S. economy added 165,000 jobs in October, in a surprise that far outpaced expectations by economists and analysts.

The unemployment rate in October dropped to 4.1%, extending a near historically-low streak.

“Through September 2026, the US labor market had kept unemployment below 5% for 61 straight months,” wrote Apollo Global Management chief economist Torsten Slok on Friday. He noted that the labor market was “on the verge of becoming the longest period of sustained labor market strength in modern US history.”

While that steady figure reflects fulsome employment across the nation, economists also say that it reflects a stagnation.

“The problem is the low rate of turnover,” said Diane Swonk, chief economist at KPMG, also noting that “fewer people are entering the labor force.”

But the data showed that sluggish wage growth did not meaningfully improve. Average hourly earnings rose 3.1% from a year ago, which was also more than expected, but that continues to track well below the rate of inflation, as it has since March.

Inflation is 3.7% and on the upswing, as of the most recent Consumer Price Index released on Oct. 14. Business inflation is rising even faster, a likely sign of what’s to come for consumers at grocery stores and retail outlets.

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