Total nonfarm payroll employment rose 165,000 in October, and the unemployment rate held at 4.1 percent, according to the U.S. Bureau of Labor Statistics. Employment increased in professional and business services, health care, and transportation and warehousing. The unemployment rate has improved to 4.1 percent from 4.5 percent last year.
Despite the strong jobs report, mortgage rates ended the day flat at 7.17 percent. The report did not send mortgage rates or bond yields much higher. The 10-year yield closed at 4.86 percent for the week.
Stock price movements in AI-related companies drove market reaction more than the jobs data. CoreWeave's stock price moved 10 percent pre-market and influenced bond yields. As CoreWeave stock fluctuated throughout the day, bond yields and mortgage rates followed.
Residential construction employment remains a key recession indicator. This labor pool has not shown a clear downtrend as it has in previous cycles, despite concerns about mortgage rates staying elevated. Builders have used rate buydowns to keep new home sales near 2019 levels, and remodeling work has held up.
Construction labor could face pressure if mortgage rates remain high and if an AI data center slowdown occurs. Business services jobs posted one of the largest monthly gains in years, while construction jobs declined slightly in October.