The latest report, released Friday by the Labor Department, showed that the civilian unemployment rate fell 0.2 percentage point from 4.6 percent in September. It marked the third month in a row that the politically prominent jobless rate declined.
The tally of new jobs added to the economy in October fell short of economists expectations for an increase of around 125,000 positions, however.
"At this stage of recovery, we should be generating well over 250,000 every month," said Ron Blackwell, chief economist of the AFL-CIO.
Still, job gains in both August and September turned out to be much stronger than previously estimated — and that took a lot of the sting out of October's less-than-expected payroll performance.
Meanwhile, a disappointing sales performance and outlook from Wal-Mart Stores Inc. Thursday raised the possibility of price wars this holiday season — a boon to consumers but a troubling prospect for the entire retail industry.
Economists were expecting the unemployment rate to hold steady in October or possibly edge up a notch.
"This is some unexpectedly good news on the labor front," Mark Vitner, senior economist at Wachovia, told CBS Radio News. "It flies in the face of some of the other reports that we've seen this week, which suggested that the economy might be slowing down more than had been previously thought."
"A drop in the unemployment rate can mean that there are more jobs out there, or it can mean that fewer people are looking for work, and I think that's what you see over the course of the change from the summer until now," countered Blackwell.
Friday's report provided the last snapshot of the nation's employment scene before next week's elections.
Workers saw solid wages gains last month.
Workers' average hourly earnings climbed to $16.91 in October, a sizable 0.4 percent increase from September. That increase was bigger than the 0.3 percent rise economists were expecting. Over the last 12 months, wages grew by 3.9 percent.
Growth in wages is good for workers, but a rapid and sustained advance makes economists fret about inflation flaring up. That's not good for the economy or workers' pocketbooks, ultimately, because inflation can eat into everybody's buying power.
The hunt for a job got shorter.
The average time that the unemployed spent in their search for work in October was 16.5 weeks, an improvement from the average 17.4 weeks registered in September.
"There's a lot of people out there that are able to work, that simply aren't looking for work, because they don't believe it's there," Blackwell told CBS Radio News.
How voters view job availability, wage growth and other economic conditions is likely to play a role in the balloting nationwide on Tuesday. Republicans, fighting to retain control of Congress, say Americans are mostly better off, while Democrat rivals disagree, saying low- and middle-income workers are struggling.
President Bush's approval rating on the economy is at 40 percent, among all adults surveyed in an AP-Ipsos poll. That remains near his lowest ratings. Those surveyed trusted Democrats more than Republicans to handle the economy.
On the payroll front, job losses in manufacturing, construction and retail offset gains in professional and business services, education and health, government and elsewhere.
Factories shed 39,000 jobs in October, marking the fourth straight month of employment cuts. Construction companies got rid of 26,000 jobs, while retailers trimmed 3,500 positions.
"Those losses, however, were offset by increased hiring in some of the services industries, particularly professional and business services, which added 43,000 jobs during the month," said Wachovia's Vitner.
Education and health expanded employment by 28,000, and the government payroll swelled by 34,000.
All told the 92,000 total net jobs added in October were the fewest in a year, when the economy was suffering the blow of the Gulf Coast hurricanes.
That disappointment, however, was offset by much better job gains in the previous two months. Employers added 148,000 jobs in September, versus the 51,000 first reported. Payrolls grew by a robust 230,000 in August, stronger than the 188,000 slots previously recorded.
The 4.4 percent unemployment rate was the lowest since the spring of 2001.
The jobless rate for blacks fell to 8.6 percent last month, from 9.2 percent in September. The unemployment rate for Hispanics dropped to 4.7 percent, from 5.4 percent. The jobless rate for teen-agers declined to 15.4 percent from 16.4 percent.
The employment gains come against a backdrop of a slowing national economy, down to a 1.6 percent annual rate in the late summer, the most sluggish pace in more than three years. The housing slump was a major factor in the slowdown. Economists believe growth in the current October-to-December quarter will turn out better.
"The economy is probably going to be able to better withstand the slowdown in the housing sector and the slowdown in the automotive sector that we're likely to see over the next couple of months," said Vitner.
Wal-Mart, the world's largest retailer, whose sales were dragged down by a failed women's fashion strategy that went too trendy and by disruptions from a store remodeling program, said it will be using price as a weapon in such areas as toys and electronics to drive holiday sales.
"The news from Wal-Mart is definitely discouraging," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. "They are going to be very price aggressive. And it is going to have an effect on everyone. It is going to force other retailers to cut their prices, which in turn will squeeze their profit margins."
The latest development from Wal-Mart came as the nation's retailers reported mixed October sales, the result of consumers taking a breather after going on a buying spree in September.