In October, the U.S. labor market experienced a rebound, as nonfarm payroll employment increased by 165,000 jobs and the unemployment rate decreased to 4.1%.
Nevertheless, the ongoing weakness in residential construction is in stark contrast to the improvement in overall employment.
Employment in this sector decreased by 16,400 jobs, the most significant monthly decline since March 2021.
The labor market has experienced job losses in seven of the past 22 months, despite the October rebound.
Wage growth remained moderate in October, with average hourly earnings increasing by 3.1% year over year, a decrease from the upwardly revised 3.2% increase in September.
The average hourly wage was $38.00.
The persistent slowdown in wage growth implies that wage pressures are being alleviated.
National Employment
The Employment Situation Summary published by the Bureau of Labor Statistics (BLS) indicates that total nonfarm payroll employment increased by 165,000 in October, which follows an upwardly revised gain of 60,000 in September.
The revisions to prior months were generally positive, which reversed the downward revisions from the previous month.
August’s job growth was revised up by 53,000 from the 133,000 reported last month to 186,000, and September’s gain was revised up by 31,000 from an initial estimate of 29,000 to 60,000 for the month.
In comparison to the 60,000 downward revision reported in the previous month, the combined effect of these revisions was to increase the number of jobs by 84,000 from the previously reported totals.
In 2026, employment growth has been bolstered.
The current data vintage has recorded an average of 86,000 monthly payroll gains through October, which is an increase from the 68,000 monthly average reported through September.
This enhancement is indicative of the robust employment growth that occurred in October and the upward revisions to August and September.
The current rate is in stark contrast to the average of only 10,000 per month in 2025 and 122,000 per month in 2024.
In comparison to the 496,000 increase that was reported one month ago, the total nonfarm employment has increased by 885,000 over the past 12 months.
In October, the unemployment rate decreased from 4.2% in September to 4.1%.
The number of employed individuals increased by 463,000 during the month, while the number of unemployed individuals decreased by 41,000.
In October, the civilian labor force expanded by 421,000 total, continuing the labor force growth that commenced in August.
In October, the labor force participation rate—the percentage of the population that is either employed or seeking employment—increased by 0.1 percentage point to 61.9%, signifying its fourth consecutive monthly increase.
Nevertheless, the rate is significantly lower than the 63.3% recorded at the beginning of 2020, which was the pre-pandemic level.
The participation rate among prime working-age individuals (aged 25 to 54) remained constant at 83.7%, which is consistent with the previous year’s level.
Health care (+42,000) and transportation and warehousing (+25,000) were the leading sectors of employment growth in October, with the exception of construction.
Retail trade (+6,000) and financial activities (+7,000) also experienced growth.
These increases were partially counterbalanced by decreases in leisure and hospitality (-13,000) and wholesale trade (-9,100).
Construction Employment
In October, the construction sector experienced its first monthly decline since February, with a 3,000-job decrease.
This follows a 16,000-job increase in September, which was revised upwards.
Residential construction employment experienced the most significant monthly decline since March 2021, with a decrease of 16,400 within the industry.
Conversely, employment in non-residential construction increased by approximately 13,300.
In October, the number of residential construction workers was 3.3 million, with 921,000 workers employed by builders and remodelers, a decrease from the 922,000 workers in September, and approximately 2.3 million residential specialty trade contractors.
In October, the six-month moving average of residential construction employment changes deteriorated to a loss of approximately 4,583 jobs per month, compared to a loss of approximately 3,283 jobs in September.
This marks the twentieth consecutive month of year-over-year decline in residential construction, which has ceded a net of 40,200 jobs over the past 12 months.
This indicates a deterioration in employment from the 26,100 job losses that were reported a month ago.
Residential construction employment is still 1,270,900 positions above its post-Great Recession low, although the cushion has decreased from 1,287,300 in September.
In October, the seasonally adjusted unemployment rate for construction workers decreased from 4.3% in September to 4.1%.
It maintained a relatively low level.
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