A stronger-than-expected 165,000-job gain and a 4.1% unemployment rate lifted rate-hike odds and pushed yields up across the curve.
MoneyTurkey Bonds Desk | 6 November 2026
Key points
- US nonfarm payrolls rose 165,000 in October, well above the 65,000 consensus, while the unemployment rate fell to 4.1%.
- The 2-year Treasury yield rose 6 basis points to 4.52%, the 10-year yield rose 3 basis points to 4.87%, and the 30-year yield rose 2 basis points to 5.27%.
US nonfarm payrolls jumped 165,000 in October, beating forecasts by 100,000 and prompting a repricing of Federal Reserve policy. The unemployment rate slipped to 4.1%, while prior months were revised higher by a combined 84,000. Treasury yields rose across the curve as markets lifted the odds of a December rate hike to 78%.
What happened
The Labor Department reported that payrolls rose 165,000 after an upwardly revised 60,000 gain in September. Economists polled by Reuters had expected a 65,000 increase. The unemployment rate fell to 4.1%.
Private payrolls also exceeded forecasts, while professional and business services added 70,000 jobs. Involuntary part-time employment rose 339,000, pointing to lingering slack beneath the headline strength.
Wage growth came in at 0.4% for the month. The labor participation rate ticked higher, reinforcing the impression of a resilient jobs market.
What is moving yields
The 2-year Treasury yield rose 6 basis points to 4.52%, the 10-year yield rose 3 basis points to 4.87%, and the 30-year yield rose 2 basis points to 5.27%. Yields initially climbed after the data release before paring gains.
Traders raised the probability of a 25-basis-point Federal Reserve hike in December to 78% from 70% ahead of the report. The move reflects the view that a stronger labor market gives the central bank more room to focus on inflation risks.
Market participants cited the upward revisions and the three-month average hiring pace of 137,000 as evidence that the labor market remains solid, supporting the shift in rate expectations.
Why it matters
The data shift attention from employment to inflation as the next driver of monetary policy. With political pressure on the Fed easing, energy prices and the November CPI print will now set the tone for December pricing.
Bond desks noted that the report keeps the door open for higher rates for longer, favoring shorter-to-intermediate duration over long bonds. Equity markets reacted with mixed moves: the Nasdaq rose 1.7%, the S&P 500 gained 0.6%, and the Dow fell 0.6%.
The combination of solid job growth and contained wage pressures suggests steady growth without overheating, leaving inflation, particularly from energy, as the key swing factor for the bond market.
What to watch
- November CPI release for energy-driven inflation signals
- Initial jobless claims trend for labor-market confirmation
- Fed speakers for any shift in December hike language
- 30-year Treasury yield reaction to sustained 5.27% level
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For information only. Not investment advice.
Sources
- Yahoo Finance: https://finance.yahoo.com/economy/policy/articles/strong-october-jobs-report-sends-134858909.html
- Reuters: https://www.reuters.com/business/view-strong-october-jobs-report-sends-yields-higher-2026-11-06/
- The Washington Post: https://www.washingtonpost.com/business/2026/11/06/us-economy-added-165000-job-october-strong-gain/
- WSJ: https://www.wsj.com/finance/investing/u-s-treasurys-little-changed-markets-await-employment-data-88f3f2b6
- South China Morning Post: https://www.scmp.com/news/world/united-states-canada/article/3373607/us-adds-165000-jobs-october-labour-market-beats-expectations
- CoinDesk: https://www.coindesk.com/markets/2026/11/06/u-s-added-165-000-jobs-in-october-blowing-past-65-000-estimate
