HighIV Macro Policy & Sovereign Debt6 November 2026, Friday · 16:30 TRT (UTC+3)
US payrolls rise by nearly three times the forecast in October
US non-farm payrolls rose by 165,000 in October against a consensus of 65,000 in the LSEG poll. Unemployment fell to 4.1%, and August and September were revised up by a combined 84,000. CME FedWatch put the probability of a 9 December hike at 76.8%.
According to Bureau of Labor Statistics data released on 6 November, October's gain of 165,000 is more than three times the monthly average of 48,000 over the previous 12 months. August was revised from 133,000 to 186,000 and September from 29,000 to 60,000. The private sector added 159,000 jobs, led by professional and business services with 70,000, healthcare with 41,600 and manufacturing with 19,000.
Average hourly earnings rose 0.4% on the month and 3.1% on the year; investingLive put the consensus at 2.9%, Fox Business at 2.4%. According to AP, the Iran war has pushed petrol above 4 dollars a gallon, leaving the 3.1% wage gain trailing prices. The jump in hiring, in other words, does not close the loss of real income.
The number of people working part-time for economic reasons rose by 339,000 to 4.84 million, and U6, the broad measure of unemployment, climbed from 7.6% to 7.9%. investingLive attributes 356,000 of that increase to slack work at the employer. Companies may be cutting hours rather than heads.
The 2-year yield rose 4.5 basis points to 4.52%, while the 10-year fell 2.4 basis points to 4.86%. According to Fox Business, the FedWatch probability of a December hike rose from 66.9% a week earlier to 76.8%. A 25 basis point move would lift the policy range to 4–4.25%.
Talay assessment
Bottom line
The October report largely removes the last data hurdle before a Fed hike on 8–9 December. The constraint is no longer employment. Wage growth of 3.1% is lagging energy-driven prices, and the 339,000 rise in involuntary part-time work shows demand cooling through hours. The most likely path is a 25 basis point hike in December followed by a data-dependent pause.
Likely effects
- US front-end ratesNegativeWeeks
Pricing a December hike at 76.8% took the 2-year yield to 4.52%; the front end has become more sensitive to the Fed path.
- Household incomeNegative1–6 months
A 3.1% wage gain is being eroded by petrol above 4 dollars; consumption may stay weak despite job growth.
- TürkiyeNegative1–6 months
A December Fed hike raises dollar funding costs and tightens external financing conditions for emerging-market borrowers.
Possibilities, ranked
- 125 bp in December, then a pause65%
The Fed lifts the range to 4–4.25% on 9 December and ties its next move to energy prices.
Watch: The 9 December FOMC decision and dot plot
- 2Lost hours dominate, the Fed holds25%
Involuntary part-time work keeps rising in the November report, U6 climbs and the committee defers the hike.
Watch: U6 and part-time employment in the November jobs report
- 3Wage momentum brings two hikes10%
Wage growth holds near 0.4% a month and markets price a second move for early 2027.
Watch: November average hourly earnings
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Non-farm payrolls▲ +165k
- December hike probability▼ 76.8%
- US 2-year yield▼ +4.5 bp
- U6 broad unemployment▼ 7.9%
Sources
- U.S. Bureau of Labor Statistics — The Employment Situation, October 2026
- investingLive — US October non-farm payrolls +165K vs +65K expected
- Fox Business — October jobs report: US economy added 165,000 jobs last month
- Alaska Public Media (AP) — U.S. continues to generate jobs, yet inflation is eroding spending power
- investingLive — Americas market news wrap: Non-farm payrolls beat estimates