U.S. Adds 165,000 Jobs in October, Rate Hike Expectations Rise to 80%

In October, the U.S. non-farm payrolls added 165,000 jobs, far exceeding market expectations of 65,000, while the unemployment rate fell to 4.1%. The data for August and September was revised upward by 84,000, indicating that the labor market is more resilient than expected. Average hourly earnings increased by 0.4% month-on-month and 3.1% year-on-year, with wage growth showing no significant signs of cooling. The number of people forced to work part-time due to economic factors rose by 339,000, reflecting a robust job market but a divergence in labor quality and job structure. Following the data release, market expectations for a 25 basis point rate hike by the Federal Reserve in December rose to about 80%. The policy focus has shifted back to inflation control, with the CPI to be released on November 10 becoming a key test; if prices remain strong, tightening expectations may further solidify. Politically, with the Democrats controlling the Senate, they will gain greater power in personnel nominations. If Warsh were to become the Fed chair, he would face challenges in forming a core team to support his reform direction. The White House's influence on monetary policy is limited, but interest rates may not necessarily trend towards easing, as actual policy will still depend on inflation, employment, and internal consensus within the FOMC. Additionally, NVIDIA is undergoing an independent investigation as founder Jensen Huang may become a target of foreign intelligence operations, with the board supporting his continued leadership of the company. This incident has raised concerns about governance and national security risks in the AI sector. Strong job growth has heightened rate hike expectations, political checks limit personnel restructuring at the Fed, and non-financial risks in the AI industry are gradually emerging, with the dollar, bond yields, and tech stock valuations continuing to be influenced by multiple factors.