US employers add 165,000 jobs in October and pay rises 3.1%. What that could do for a debt-to-income ratio
The US added 165,000 jobs in October and pay rose 3.1% in a year. What it means for Fed odds and a debt-to-income ratio, plus the week in review.
US employers added 165,000 jobs in October, more than double forecasts, as unemployment edged down to 4.1% and average pay rose 3.1% over the year (Bureau of Labor Statistics, 6 November 2026).
The result
Our week-ahead post had the consensus at 55,000 (Newsquawk, 30 October 2026), which reached about 65,000 by Friday (Bloomberg via Yahoo Finance, 6 November 2026).
- Jobs: 165,000, against a 48,000 monthly average over the prior year. August and September were revised up by a combined 84,000.
- Where: professional and business services added 70,000 and health care 42,000.
- Unemployment: 4.1%, against 4.2% expected (International Business Times, 6 November 2026).
- Pay: average hourly earnings rose 0.4% in the month to USD 38.00, against 0.3% expected (Newsquawk), and 3.1% over the year (BLS).
What it means for rates
The 10-year Treasury yield closed at 4.84% on Thursday (US Treasury), rose to 4.894% after the data (CoinDesk, 6 November 2026) and later stood near 4.87% (Trading Economics, 6 November 2026), still below Tuesday's 4.95% (US Treasury).
Futures priced about an 80% chance of a quarter-point Fed rise in December, up from about 75% before the report (Reuters via AOL, 6 November 2026). Peter Cardillo of Spartan Capital Securities saw a labour market extending a long period of growth (rallies.ai, 6 November 2026).
Inflation is the next test. Prices rose 3.7% in the 12 months to September (Trading Economics), ahead of pay, and October's figures land on 10 November (BLS). CoinDesk said those numbers could prove more important for December. Freddie Mac's next rate reading is due on 12 November.
What does a pay rise do to a debt-to-income ratio?
The Debt-to-Income Ratio calculator takes gross monthly income, the housing payment and other monthly debts, and shows front-end and back-end ratios plus the payment at 28% of income.
Take an illustrative household of two earners on about the BLS average of USD 38.00 an hour for 34.4 hours a week, or about USD 11,300 a month, up 3.1% from USD 10,960. Add a USD 400,000 loan over 30 years, USD 650 of monthly tax and insurance and USD 600 of other debts, at Freddie Mac's 7.40% from mid-October and 7.18% from 5 November:
| Income (USD a month) | Rate | Housing payment (USD) | Front-end | Back-end |
|---|---|---|---|---|
| 10,960 | 7.40% | 3,420 | 31.2% | 36.7% |
| 11,300 | 7.40% | 3,420 | 30.3% | 35.6% |
| 11,300 | 7.18% | 3,360 | 29.7% | 35.0% |
So a year of pay growth takes about a point off each ratio, and the fall in rates since mid-October takes off about 0.6 of a point more.
How much loan fits at 28% of income?
At 28% of income, the housing payment is USD 3,069 on the lower income and USD 3,164 on the higher. Take off the USD 650, and the free Overpayment calculator's monthly payment shows which loan fits the rest: about USD 349,000 at 7.40%, USD 363,000 with the higher income and USD 371,000 at 7.18%. That's USD 22,000 more loan at the same 28%.
Put USD 150 a month of a pay rise towards the USD 400,000 loan instead, and Overpayment shows it repaid 4 years 8 months sooner at 7.18%, with an interest difference of USD 106,186.
The week in review
The RBA lifted its cash rate to 4.85% on a 6 to 3 vote on 3 November (RBA; our post). Democrats won the House and Senate in the US midterms (NBC News via NBC Chicago, 4 November 2026; our post). The Bank of England raised Bank Rate to 4% on an 8 to 1 vote on 5 November (Bank of England; our post). Freddie Mac's 30-year average fell to 7.18% the same day, its third straight weekly fall (Freddie Mac; our post).
Next come the Fed on 8 to 9 December, the RBA on 8 December and the Bank of England on 17 December.
Run your own numbers in Stresst
The worked figures above came out of the Stresst calculators.
Overpayment is free. The Debt-to-Income Ratio calculator is Premium, which adds PDF export on every calculator and starts with a 7-day free trial.
Inflation figures land on Tuesday 10 November, so it's a good moment to have your numbers ready. On iPhone, Stresst is in beta through Apple's TestFlight app.
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Know your numbers before you commit.
Sources
- US Bureau of Labor Statistics, "The Employment Situation: October 2026", 6 November 2026. https://www.bls.gov/news.release/empsit.nr0.htm
- US Bureau of Labor Statistics, "Schedule of Releases for the Consumer Price Index", accessed 6 November 2026. https://www.bls.gov/schedule/news_release/cpi.htm
- US Department of the Treasury, "Daily Treasury Par Yield Curve Rates", 3 and 5 November 2026. https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202611
- Reuters via AOL, "Traders raise bets of Fed rate hike after jobs report", 6 November 2026. https://www.aol.com/articles/traders-raise-bets-fed-rate-134402000.html
- CoinDesk, "U.S. added 165,000 jobs in October, blowing past 65,000 estimate", 6 November 2026. https://www.coindesk.com/markets/2026/11/06/u-s-added-165-000-jobs-in-october-blowing-past-65-000-estimate
- Trading Economics, "US 10 Year Treasury Note Yield", 6 November 2026. https://tradingeconomics.com/united-states/government-bond-yield
- Yahoo Finance, "Stock market today" live blog, 6 November 2026. https://finance.yahoo.com/markets/live/stock-market-today-friday-november-6-dow-sp-500-nasdaq-jobs-report-earnings-135953863.html
- International Business Times, "Job Creation Blew Past Expectations in October. Odds of a Fed Rate Hike Climbed.", 6 November 2026. https://www.ibtimes.com/us-jobs-report-october-payrolls-unemployment-3809489
- rallies.ai, "Strong October jobs report sends yields higher", 6 November 2026. https://rallies.ai/news/strong-october-jobs-report-sends-yields-higher-f01385bed2cb90af
- Newsquawk, "Week In Focus 2nd-6th November 2026", 30 October 2026. https://www.newsquawk.com/headlines/week-in-focus-2nd-6th-november-2026-highlights-include-us-midterm-election-nfp-ism-pmis-rba-boe-and-ez-cpi-
- Reserve Bank of Australia, "Statement by the Monetary Policy Board", 3 November 2026. https://www.rba.gov.au/media-releases/2026/mr-26-30.html
- Reserve Bank of Australia, "Calendar", accessed 6 November 2026. https://www.rba.gov.au/schedules-events/calendar/
- NBC Chicago, "Election 2026: Which races still haven't been called, and which Senate, House seats flipped?", 4 November 2026. https://www.nbcchicago.com/news/local/election-2026-which-races-still-havent-been-called-and-what-states-flipped-seats-mississippi-alaska-election-results/4012174/
- Bank of England, "Monetary Policy Summary and minutes, November 2026", 5 November 2026. https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2026/november-2026
- Bank of England, "Upcoming MPC dates", accessed 6 November 2026. https://www.bankofengland.co.uk/monetary-policy/upcoming-mpc-dates
- Freddie Mac, "Primary Mortgage Market Survey", 5 November 2026. https://www.freddiemac.com/pmms
- Federal Reserve, "FOMC calendars", accessed 6 November 2026. https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm
This article is general information only and is not financial, tax or legal advice.