The U.S. economy added 165,000 jobs in October, delivering a surprisingly strong figure that points to early artificial intelligence infrastructure growth while doing little to ease mounting cost-of-living pressures for American households, according to data released by the Bureau of Labor Statistics and reported by nbcnews.com.
The October report pulled the national unemployment rate down to 4.1%, extending a near-historic low streak. Jennifer Timmerman, senior investment strategy analyst at Wells Fargo, noted that the report added to evidence of labor-market stability and consumer resilience. Yet economists caution that the steady jobless rate masks underlying stagnation. Diane Swonk, chief economist at KPMG, pointed to a low rate of turnover, explaining that fewer people are currently entering the labor force.
Wage growth remained sluggish last month. Average hourly earnings rose 3.1% from a year ago, tracking well below the rate of inflation. Inflation reached 3.7% and remained on the upswing according to the consumer price index released Oct. 14, while business inflation accelerated even faster.
Heather Long, chief economist at Navy Federal Credit Union, described the report as a blowout but cautioned that headwinds would blunt any tangible impact for workers. The inflation resurgence has been so strong that it has wiped out all wage gains for seven straight months, and essentially erased all wage gains since January 2025, Long wrote on X.
It was a great October jobs report, but that doesn't erase this painful fact: Inflation has wiped out all wage gains for 7 straight months. Average wage gains in past year: 3.1% Inflation: ~3.5% (we'll get the latest data Tuesday) In fact, the inflation resurgence has been so… pic.twitter.com/7mUHR3RiZC
The October data also revealed strong upward revisions to previous months. Net job gains for August were revised up by 53,000, moving from 133,000 to 186,000, while September figures jumped by 31,000, bringing that month’s total from 29,000 positions added to 60,000.
Manufacturing and Construction Gains Tied to AI Infrastructure
The data suggests that the sprawling data center buildout across the country is supporting construction and manufacturing roles. Manufacturing positions rose by 19,000 in October, pushing the sector’s total gains past 100,000 since its recent low in December 2025. Computer and electronics manufacturing, machinery manufacturing, and primary metal manufacturing led those gains.
Nonresidential construction roles jumped by almost 3,000 in October, reflecting strong demand for data center construction. Conversely, the home building and contracting sector shed more than 15,000 jobs as high interest rates paralyzed the residential real estate market and suppressed demand for refinancing loans.
Other major sectors continued steady hiring. Healthcare added 42,000 jobs, exceeding its average monthly gain over the prior year. The professional and business services sector gained 70,000 jobs, blowing past its typical monthly average of 15,000, while general merchandise retailers added more than 18,000 positions for early holiday hiring.
Following the data release, the odds of an interest rate hike by the Federal Reserve at its upcoming December 8 and 9 meeting jumped to nearly 80%.
