U.S. jobs continued to rise at a steady pace in October and wagegains accelerated, signs that the labor market and economy madesteady progress at the start of the fourth quarter.

Payrolls climbed by 161,000 last month following a 191,000 gainin September that was larger than previously estimated, a LaborDepartment report showed Friday. The median forecast in a Bloombergsurvey called for 173,000. The jobless rate fell to 4.9 percent,while wages rose from a year earlier by the most since June2009.

The figures are likely to keep the Federal Reserve on track toraise borrowing costs next month for the first time in 2016.Underlying the steady gains in employment is a balance betweenhiring managers' need to keep up with stable domestic demand andthe struggle to match more limited labor to skilled-jobvacancies.

“This is a good, solid report, consistent with the fed moving inDecember and certainly consistent with 2 percent economic growth,”said John Silvia, chief economist at Wells Fargo Securities.“Growth across wages was strong, which is going to reinforce theFed's view.”

Workers have been in short supply for 13 straight months,according to the Institute for Supply Management survey ofservice-industry companies, which make up almost 90 percent of theeconomy.

The median forecast in a Bloomberg survey called for a 173,000advance in payrolls. Estimates in the Bloomberg survey ranged fromgains of 105,000 to 208,000 after a previously reported 156,000September increase.

Revisions added a total of 44,000 jobs to payrolls in theprevious two months. The unemployment rate, which is derived from aseparate Labor Department survey of households, dropped from 5percent the prior month, returning to its level from August.

While economists and policy makers largely agree that the U.S.economy is close to full employment, blemishes remain, with theranks of part-time workers and long-term jobless still higher thanbefore the last recession.

The labor force participation rate, which indicates the share ofworking-age people who are employed or looking for work, slipped to62.8 percent from 62.9 percent, as the number of people in thelabor force declined.

The government's underemployment rate dropped to 9.5 percent inOctober from 9.7 percent, while the number of people workingpart-time for economic reasons was little changed, according toFriday's report. Some 5.89 million American employees were inpart-time jobs but wanted full-time work.

Wage gains picked up, with average hourly earnings rising 0.4percent from a month earlier to $25.92. The year-over-year increasewas 2.8 percent, compared with 2.7 percent in the year ended inSeptember.

Higher wages are starting to encourage more Americans to quittheir jobs with the confidence they'll find other work that paysmore. The number of job leavers as a share of unemployed rose to12.1 percent in October, the highest since February 2007.

The average work week for all workers held at 34.4 hours inOctober.

Among service providers, education and health services led withan increase of 52,000 jobs, followed by professional and businessservices at 43,000. Retailers pared payrolls by 1,100 on declinesat electronics and appliance stores and clothing shops.

Factories reduced payrolls by 9,000 after an 8,000 decline themonth before, in line with a report earlier this week that showedmanufacturing barely expanded in October while orders moderated.Employment at construction companies rose by 11,000.

Governments added 19,000 workers.

Friday's figures showed 238,000 Americans weren't at workbecause of weather during the survey week, even though they werecounted as employed in the household survey, the agency said. Badweather can affect the payroll count if employees didn't receivecompensation for the entire pay period that included the 12th ofthe month.

Hurricane Matthew's assault on the East Coast was just fading atthe start of the week with the 12th. The storm moved up the Floridacoastline on Oct. 7 before making landfall in South Carolina thefollowing day and continuing on to North Carolina, causing floodingand power outages along the way.

The labor-market figures offer a last big hint at the directionof the economy before Americans flock to the polls Nov. 8.

Figures released last week on the third-quarter pace of growthoffered a mixed picture. While gross domestic product increased ata 2.9 percent annualized rate for the strongest pace in two years,inventory rebuilding and a soybean-related jump in exports largelyfueled the rebound. Consumer spending slowed more thanexpected.

Fed policy makers who concluded a two-day meeting Wednesday inWashington offered an assessment of the economy that was broadlysimilar to their September statement, reinforcing the consensusview that they will raise the benchmark interest rate in Decemberfor the first time this year.

The central bankers reiterated that the “labor market hascontinued to strengthen and growth of economic activity has pickedup” since the first half of 2016. Even so, they opted to wait for“some further evidence” of progress before increasing borrowingcosts.

Bloomberg News

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