Breaking: US Nonfarm Payrolls rise by 165K in October vs. 65K expected

Nonfarm Payrolls (NFP) in the United States (US) rose by 165K in October, the US Bureau of Labor Statistics (BLS) reported on Friday. This print followed the 60K increase recorded in September (revised from 29K) and surpassed the market expectation of 65K by a wide margin.

In this period the Unemployment Rate declined to 4.1% from 4.2%, while the Labor Force Participation Rate improved to 61.9% from 61.8%.

Finally, annual wage inflation, as measured by the change in the Average Hourly Earnings, softened to 3.1% from 3.2%.

"Market reaction to Nonfarm Payrolls data The US Dollar (USD) gathers strength with the immediate reaction to the impressive Nonfarm Payrolls data.

Employment data could influence the US Dollar’s valuation, although markets widely expect a 25 bps rate hike in December.

Even though market participants widely expect the Federal Reserve (Fed) to raise the policy rate by 25 basis points (bps) in December, the underlying details of the employment report could impact how they perceive the policy outlook in early 2027 and drive the US Dollar’s (USD) valuation.

The Unemployment Rate is forecast to remain unchanged at 4.2%, while the monthly wage inflation, as measured by the change in Average Hourly Earnings (AHE), is projected to rise to 0.3% from 0.1%.

The Fed left the policy rate unchanged at the range of 3.75%-4% after the October policy meeting, as anticipated.

When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy.