The four magic words of American elections are: It's the economy, stupid. As it turns out, though, the economy had already turned a corner when voters delivered their verdict this week.

The Bureau of Labor Statistics published the October jobs report this morning, and it blew out expectations from economists. The number of jobs almost tripled economists' forecasts for the month, while revisions to the two previous months added another 84,000 jobs to the total:

Total nonfarm payroll employment rose by 165,000 in October, and the unemployment rate changed little at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, in health care, and in transportation and warehousing.

Wages also kept up their growth, and hours increased as well:

In October, average hourly earnings for all employees on private nonfarm payrolls increased by 14 cents, or 0.4 percent, to $38.00. Over the past 12 months, average hourly earnings have increased by 3.1 percent. In October, average hourly earnings of private-sector production and nonsupervisory employees rose by 12 cents, or 0.4 percent, to $32.75. (See tables B-3 and B-8.)

The average workweek for all employees on private nonfarm payrolls remained at 34.4 hours in October. In manufacturing, the average workweek was unchanged at 40.5 hours, and overtime edged up by 0.1 hour to 3.1 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls declined by 0.1 hour to 33.8 hours. (See tables B-2 and B-7.)

The wage growth is not enough to keep up with the current pace of inflation, but it is not far behind. That sustained wage growth shows that the jobs market has been healthy for some time, while still avoiding the wage-price spiral that high inflation can eventually create. BLS added 53,000 jobs to its August report and 31,000 to its September report to underscore the overall strength of job creation. It's the latest in a year of mostly positive and relatively strong months in job additions, although both January and July were exceptions – and January's report resulted from the two-month government shutdown that preceded it. 

Washington Post econ reporter Heather Long calls it a "blowout," and notes the sharp improvement to the jobs market in 2026:

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One point to note in the chart Long includes is that the amplitude of those job additions came during the Biden Border Crisis. There was a lot of cheaper labor around in those years, and that has created some issues in comparisons to an era when much of that illegal alien labor has left the US. That transition has impacted BLS reports for the past two years, mainly last year, and it looks as though we are finally getting to a foundation of reporting that gives us more reliable comparisons as well as more rational guideposts. 

The Wall Street Journal declares that the labor market might be "strengthening":

Friday’s report from the Labor Department topped economists expectations for a 59,000 job gain. The unemployment rate, meanwhile, slipped to 4.1%. Economists had expected 4.2%.

Job figures for both September and August were revised higher by a combined 84,000. That is a strong indication that the job market has pulled out of its midyear doldrums.

It's been strengthening for some time. The WSJ is more on the mark about the next steps from the Fed, though:

Friday’s report probably won’t alter the Federal Reserve’s path on interest rates. Fed policymakers are more focused on inflation, which has remained firmly above their 2% target. It would likely take a sharp deterioration in the labor market to dissuade them from raising rates when they next meet in December.

Fed officials have long been reluctant to put the focus too squarely on any one jobs report. They might be even more cautious now, given uncertainty about precisely how many jobs are needed to keep the unemployment rate low, increased month-to-month volatility, and new Fed Chairman Kevin Warsh’s desire to make policy less dependent on short-term data.

Expect a rate raise in the next meeting. If the jobs market looks this strong, the Fed can risk some tightening of the money supply. They may keep an eye on investors, however, who got spooked this week by the Democrat rout in the midterms and its implications for AI investment. 

Put this together with the Q2 GDP report and the economy looks strong indeed. Too bad Republicans couldn't make that case when they needed it.