Kenny Polcari discusses the historic performance of the S&P 500 following the midterm elections. He predicts the stock market will be higher in 12 months, continuing a trend seen in every medium-term cycle since World War II.
THE American economy Job creation was rapid in October, rebounding after a quieter September amid economic uncertainty.
What are the results of the October 2026 jobs report?
The Bureau of Labor Statistics reported Friday that employers 165,000 jobs added in October. This figure was much higher than the estimate of 65,000 economists surveyed by LSEG.
THE unemployment rate fell slightly to 4.1%, which was lower than economists’ expectations that it would remain at 4.2%.
Revisions were made to the payroll figures for the previous two months, with August being revised up by 53,000, from a gain of 133,000 to 186,000 jobs; while the change for September was revised upward by 31,000 jobs, from a gain of 29,000 to 60,000.
Taken together, employment in August and September was 84,000 higher than previously reported.
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Which sectors created or lost the most jobs in October 2026?
Private sector payrolls increased by 159,000 jobs in October, well above the 64,000 expected by economists surveyed by LSEG.
Government payrolls increased by 6,000 jobs in October. The sector’s loss of 17,000 jobs in September was revised downward to 18,000 jobs. The federal government cut 1,000 jobs in October, while state governments added 8,000 and local governments cut 1,000 positions last month.
The manufacturing sector added 19,000 jobs in October, well above the gain of 5,000 predicted by economists surveyed by LSEG. September’s gain of 9,000 jobs was also revised upward to 13,000. Professional and business services added 70,000 jobs in October, well above the average monthly gain of 15,000 jobs over the past 12 months. Employment growth in the sector was led by gains in professional, scientific and technical services (+32,900) and administrative, support, waste management and remediation services (+28,100).
The health care sector added 41,600 jobs in October, an average monthly gain of 31,000 over the past 12 months. Most of last month’s gains were in hospitals (+16,000), home health services (+10,500) and outpatient care centers (+4,800).
Transportation and warehousing created 24,800 jobs last month, with growth in couriers and messengers (+17,400) and air transportation (+3,500).
Private sector payrolls increased by 159,000 in October, well above expectations for a gain of 64,000 jobs. (Al Drago/Bloomberg via Getty Images)
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What does the October 2026 jobs report mean for the workforce?
The number of long-term unemployed, defined as those who have been out of work for 27 weeks or more, was 2 million in October and changed little over the month. The long-term unemployed represented 27.6% of all unemployed people.
The number of people employed part-time for economic reasons increased by 339,000 to 4.8 million in October. These people would have preferred to work full-time, but worked part-time because their hours were reduced or because they were unable to find full-time employment.
The participation rate was 61.9% in October, while the employment-to-population ratio was 59.3%. Both figures changed little in October and showed little net change since January.
The average hourly wage rose 3.1% year-on-year in October, above the 2.4% rise forecast by LSEG economists. Profits also rose 0.4% on a monthly basis, above the LSEG poll’s estimate of 0.3%.
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Federal Reserve Chairman Kevin Warsh and central bank policymakers will hold their next interest rate meeting on December 8-9. (Daniel Heuer/Bloomberg via Getty Images)
What do experts say about the October 2026 jobs report?
Seema Shah, chief global strategist at Principal Asset Management, said in a statement that the October jobs report “is a strong rebuttal to fears that the economy is headed for a significant slowdown.”
“Payroll growth surprised firmly to the upside, unemployment fell to 4.1% and job creation remains widespread, reflecting an economy that continues to comfortably absorb labor rather than one that begins to collapse under tighter financial conditions,” Shah said. “With wage growth also recovering, a December Fed hike remains firmly on the table despite the recent tightening of financial conditions.”
Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management, said the October jobs report “removed the traffic light at the December intersection for the Fed.”
“The Fed was already firmly focused on moderating inflation, and continued signs of tightening in the labor market give it the right to raise rates without hindering its jobs mandate. Further tightening is possible in the first quarter if inflation continues to be strong,” Rosner added.
What does this mean for interest rates?
October’s strong jobs report raised the likelihood of an interest rate hike by the Federal Reserve at its next meeting on December 8-9.
Market expectations for a 25 basis point rate hike strengthened on Friday, with the CME FedWatch tool showing a 76.8% probability that the Fed will raise rates in December – an increase from 66.9% a week ago. An increase of this magnitude would bring the federal funds rate within a target range of 4% to 4.25%.
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How did the market react?
The benchmark S&P 500 rose 0.65% during the Friday morning trading session.
The Dow Jones Industrial Average slipped 0.2%, while the Nasdaq Composite rose 1.25%.
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