The U.S. labor market rebounded in October, with nonfarm payroll employment increasing by 165,000 jobs and the unemployment rate declining to 4.1%. However, the improvement in overall employment contrasts with continued weakness in residential construction, where employment fell by 16,400 jobs, the largest monthly decline since March 2021.
Despite the October rebound, the labor market has recorded job losses in seven of the past 22 months.
Wage growth continued to moderate, with average hourly earnings rising 3.1% year over year in October, down from an upwardly revised 3.2% in September. Average hourly earnings reached $38.00. The continued deceleration in wage growth suggests easing wage pressures.
National Employment
According to the Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment increased by 165,000 in October, following an upwardly revised gain of 60,000 in September. Revisions to prior months were broadly positive, reversing last month’s downward revisions. August’s job growth was revised up by 53,000, from the 133,000 reported last month to 186,000, while September’s gain was revised up by 31,000, from an initial estimate of 29,000 to 60,000. Combined, these revisions added 84,000 jobs to previously reported totals, compared with the 60,000 downward revision reported in the prior month.
Job growth has strengthened in 2026. Through October, monthly payroll gains have averaged 86,000 on the current data vintage, up from the 68,000 monthly average reported through September. This improvement reflects October’s solid employment gain and upward revisions to August and September. The current pace compares with an average of just 10,000 per month in 2025 and 122,000 per month in 2024. Over the past 12 months, total nonfarm employment has grown by 885,000, compared with a 496,000 gain reported a month ago.
The unemployment rate fell to 4.1% in October from 4.2% in September. Over the month, the number of employed persons rose by 463,000, while the number of unemployed persons decreased by 41,000. Combined, the civilian labor force expanded by 421,000 in October, extending the labor force growth that began in August.
Meanwhile, the labor force participation rate—the proportion of the population either looking for a job or already holding a job—rose 0.1 percentage point to 61.9% in October, marking its fourth consecutive monthly increase. However, the rate remains well below its pre-pandemic level of 63.3% recorded at the start of 2020. Among prime working-age individuals (aged 25 to 54), the participation rate remained unchanged at 83.7%, matching its level a year earlier.
Outside of construction, employment gains in October were led by health care (+42,000) and transportation and warehousing (+25,000). Financial activities (+7,000) and retail trade (+6,000) also posted gains. These increases were partially offset by declines in leisure and hospitality (-13,000) and wholesale trade (-9,100).
Construction Employment
Employment in the overall construction sector declined by 3,000 jobs in October, marking its first monthly decline since February, following an upwardly revised gain of 16,000 in September. Within the industry, residential construction employment fell by 16,400, the largest monthly decline since March 2021. In contrast, non-residential construction employment increased by approximately 13,300.
Residential construction employment stood at 3.3 million in October, including 921,000 workers employed by builders and remodelers, down from 922,000 in September, and approximately 2.3 million residential specialty trade contractors.
The six-month moving average of residential construction employment changes worsened to a loss of approximately 4,583 jobs per month in October, from a loss of roughly 3,283 in September. Over the last 12 months, residential construction has shed a net of 40,200 jobs, marking the twentieth consecutive month of year-over-year decline. This represents a widening decline from the 26,100 job loss reported a month earlier. Residential construction employment remains 1,270,900 positions above its post-Great Recession low, with that cushion narrowing from 1,287,300 in September.
Meanwhile, the unemployment rate for construction workers declined to 4.1% in October on a seasonally adjusted basis, down from 4.3% in September. It remained at a relatively low level.
