Bumper jobs report keeps December hike on track

October nonfarm payrolls rose 165,000, beating expectations, and with upward revisions to the prior two months the three-month average climbed to 137,000 per month, the strongest since late spring. The unemployment rate fell to 4.1% from 4.2%, while the rate for workers over 25 has stayed within a remarkably narrow 0.3 percentage-point band for more than two years. Average hourly earnings rose 0.4% on the month and 3.1% year over year, and labor force participation continued its slow recovery from the sharp drop earlier in the year, consistent with other indicators of firmer autumn labor market activity. Private payrolls added 159,000, the largest since March, manufacturing rose for a sixth straight month, professional and technical services jumped 33,000 and healthcare added 42,000, while construction fell 3,000 entirely on the residential side. The household survey was also solid, with employment up 463,000 and participation at 61.9%, though the U-6 underemployment rate rose to 7.9%.