Nonfarm payrolls beat expectations, Fed's December rate hike probability rises to 80%

US nonfarm payrolls rose by 165,000 in October, more than double economist expectations, while the unemployment rate edged down to 4.1%, according to the government employment report released Friday. Following the release, futures tied to the Federal Reserve's policy rate priced in roughly an 80% probability of a 25-basis-point rate hike at the December meeting, up from about 75% before the report. The stronger-than-expected labor data reinforced trader bets that the Fed will tighten again next month. The report matters because it shifts market-implied odds for the Fed's December decision, a key input for rate-sensitive assets. What to watch next is whether incoming data and Fed commentary sustain or pare back the now-elevated hike expectations ahead of the December meeting.