Hiring was broad-based, contrary to recent trends where health care dominated job creation. Professional and business services led the sectoral gains with an increase of 70,000 jobs, followed by health care at 42,000. Notable growth was also recorded in transportation and warehousing (25,000) and manufacturing (19,000). While average hourly earnings rose 3.1% year-over-year, exceeding the 2.9% estimate, this growth remains below the current inflation rate of 3.7%. The average work week remained unchanged at 34.4 hours.
Economists characterize the current environment as “low-fire, low-hire,” where employers are reluctant to terminate existing staff but are slow to add new headcount. Diane Swonk, chief economist at KPMG, noted that the low unemployment rate partly reflects a decline in labor force participation, driven by baby boomer retirements and immigration restrictions. Torsten Slok, chief economist at Apollo Global Management, observed that the U.S. labor market had kept unemployment below 5% for 61 straight months through September 2026, approaching the longest period of sustained strength in modern U.S. history.
The report arrives three days after U.S. voters handed control of Congress to the Democrats in midterm elections, a defeat for President Donald Trump’s Republican Party driven largely by concerns over the high cost of living. Despite political shifts, the economy has shown resilience against recent shocks, including double-digit import taxes and the war with Iran, which has pushed gasoline prices above $4 a gallon. Gross domestic product advanced at a 3.4% annual pace from July through September, supported by consumer spending and artificial intelligence investment.
For the Federal Reserve, the data complicates the decision-making process regarding interest rates. Inflation remains stubbornly above the central bank’s 2% target, with business inflation rising even faster than consumer prices. Traders increased the probability of a quarter-percentage-point rate hike at the Federal Open Market Committee meeting scheduled for December 8-9 to 76.8%, according to CME Group data. However, the odds of further hikes in 2027 have fallen slightly following the election results and a recent sell-off in tech stocks.
