The U.S. economy added 165,000 jobs in October, a surprisingly strong number that includes what appear to be some AI-related construction and manufacturing jobs.
American workers have so far seen relatively few benefits from the artificial intelligence boom that has driven the stock market higher and fueled trillions of dollars in spending by the world’s top tech giants.
The unemployment rate in October dropped to 4.1%, extending a near-historic low streak.
“Through September 2026, the U.S. labor market had kept unemployment below 5% for 61 straight months,” Apollo Global Management chief economist Torsten Slok wrote Friday.
He noted that the current trend was “on the verge of becoming the longest period of sustained labor market strength in modern US history.”
While that steady figure reflects fulsome employment across the nation, economists also say that it reflects a kind of stagnation.
“The problem is the low rate of turnover,” said Diane Swonk, chief economist at KPMG. “Fewer people are entering the labor force.”
Sluggish wage growth did not meaningfully improve last month, however. Average hourly earnings rose 3.1% from a year ago, which continues to track well below the rate of inflation.
Inflation is 3.7% and on the upswing, as of the most recent consumer price index released Oct. 14. Business inflation is rising even faster, a likely sign of what’s to come for consumers at grocery stores and retail outlets.
Friday’s report also showed strong upward revisions to recent jobs data.
Net job gains for August were revised up by 53,000, from 133,000 to 186,000. September was revised up by 31,000, from 29,000 positions added to 60,000, the Bureau of Labor Statistics said in a statement.
Friday’s jobs report also suggests the sprawling AI data center buildout across the country could be supporting at least some construction and manufacturing jobs.
Manufacturing roles in October rose by 19,000 last month, according to BLS data. The sector has added more than 100,000 jobs total since its recent low, in December 2025.
The agency noted that within the manufacturing sector, the subsets of computer and electronics manufacturing, machinery manufacturing and what it called “primary metal manufacturing” led the gains.
Nonresidential construction jobs also jumped by almost 3,000 roles in October, likely an indication of demand for data center jobs.
In contrast to the commercial construction industry, the home building and contracting sector shed more than 15,000 jobs last month. High interest rates have paralyzed the residential real estate market and cut demand for the kind of refinancing loans that typically fund home renovations.
Other sectors that have been largely powering U.S. job growth for years also showed strong gains in the month. The healthcare sector added 42,000 jobs, which the BLS said was higher than its average monthly gain over the past year.
The professional and business services sector, as the agency classifies it, gained 70,000 jobs, blowing past its average monthly gain of 15,000 over the past year.
Retailers also appear to have started strong holiday hiring, with firms classified as “general merchandise retailers” adding more than 18,000 roles.
Friday’s data also bolstered the case for an interest rate hike by the Federal Reserve when it meets Dec. 8 and 9. Following the BLS release, the odds of a December interest rate hike jumped to nearly 80%.
