Payrolls jump 165,000 in October as mortgage rates hold steady
The October jobs report beat forecasts by a wide margin and revised earlier months up, yet the average 30-year rate held flat at 7.17%, Mortgage News Daily says. Residential trade contractors shed jobs again.
By American Policy WireFiled
The bottom line A jobs report that more than doubled forecasts would normally push mortgage rates up, but rates held flat while the Fed's hike camp got new data to point to.
165,000. That is how many jobs employers added in October, the Bureau of Labor Statistics said Friday, well above the roughly 65,000 forecasters expected [1, 5]. Mortgage rates barely noticed: Mortgage News Daily’s 30-year index held at 7.17% [3].
Why it matters: This report was the next test for a Federal Reserve that held rates on October 28 while two officials, Lisa D. Cook and Beth M. Hammack, voted for a quarter-point hike [6]. A strong labor market gives that camp more to point to, though the bond market did not trade the report that way on Friday [3, 4].
How we got here: On Thursday, Freddie Mac’s weekly survey put the 30-year average at 7.18%, a third straight weekly decline, as we reported on Nov. 5 [8]. The Fed’s October statement said job gains “have kept pace with the workforce” and that the unemployment rate “has changed little,” and it called inflation elevated [6].
By the numbers
- 165,000: October nonfarm payroll growth, against a 65,000 forecast and the 29,000 first reported for September [1, 5].
- 84,000: How many more jobs August and September now show after revisions. August moved to 186,000 and September to 60,000 [1].
- 4.1%: The unemployment rate, against a 4.2% forecast; the participation rate edged up to 61.9% [1, 5].
- 0.4%: Monthly gain in average hourly earnings, to $38.00. Over 12 months, pay is up 3.1% [1].
- 7.17%: Mortgage News Daily’s 30-year fixed index on Friday, flat on the day [3].
Why didn’t mortgage rates rise after a strong jobs report?
Nobody has a clean answer. Mortgage News Daily’s Matthew Graham wrote that rates held flat “despite the jobs report absolutely crushing expectations,” and that the average lender ended the day at its lowest level since September 22 [3]. After an initial knee-jerk sell-off, he wrote, yields were back near pre-report levels within eight minutes [4].
Graham listed possible reasons while cautioning that none would have predicted the move. They include the Fed’s recent stress on the inflation side of its mandate, bond traders taking cues from heavy selling in tech stocks, markets still weighing this week’s election results, and a focus on the unemployment rate, which came in closer to forecasts than payrolls did [3, 5].
Are housing jobs growing?
Not in the trades that work on homes. Residential specialty trade contractors fell by 15,200 in October to about 2.33 million, and are 35,800 below October 2025 [2]. Residential building employment slipped by 1,200 [2].
Building that is not housing tells a different story. Nonresidential building construction added 2,900 jobs in the month and is up 34,300 from a year earlier, and total construction employment is 124,000 higher than last October despite a 3,000 dip in the month [2]. Real estate employment rose 4,300 in October but remains slightly below its year-ago level [2].
Where were the gains? Professional and business services added 70,000 jobs, health care 42,000, transportation and warehousing 25,000 and manufacturing 19,000 [1].
What it means for buyers and owners:
- Rate relief held, for now. Friday’s flat close kept the daily index at its recent low, and Freddie Mac’s 15-year average was 6.57% on Thursday [3, 8].
- Paychecks are growing modestly. Average hourly pay is up 3.1% over a year, while the 30-year average sits near 7.2% [1, 8].
- The hike question stays open. The Fed said in October that more information will help it decide its policy stance; one more jobs report, on December 4, lands before the December 8-9 meeting [1, 6, 7].
- Home-trade jobs keep shrinking. The residential contractor decline follows weak remodeling spending in September, as we reported on Nov. 4, though the payroll table does not say why [2].
What’s next: The November jobs report arrives Friday, December 4, at 8:30 a.m. Eastern, and the Fed meets December 8-9 [1, 7].
The other side: One sector carried much of October. Professional and business services supplied 70,000 of the 165,000 jobs, against an average of about 15,000 a month over the past year, Graham noted, though he still called it a genuinely strong report [4]. In his afternoon recap he also raised the possibility that October data are stale if mid-October marked a shift in economic momentum [5].
Q&A Quick answers
- Q1How many jobs were added in October 2026?
- Nonfarm payrolls rose 165,000, and the unemployment rate was 4.1%, according to the Bureau of Labor Statistics [1]. Forecasters had expected about 65,000, per Mortgage News Daily [5].
- Q2Did mortgage rates go up after the October 2026 jobs report?
- No. Mortgage News Daily's 30-year index was unchanged on Friday at 7.17%, which it called the lowest since September 22 [3].
- Q3Were August and September 2026 job numbers revised?
- Yes, both up. August now shows a gain of 186,000 and September 60,000, a combined 84,000 more jobs than first reported [1].