The U.S. labour market improved in October by more than forecast, defying expectations for more subdued gains amid an intensifying pandemic and lack of additional fiscal relief.

Nonfarm payrolls increased by 638,000 after an upwardly revised 672,000 gain the prior month, according to a Labor Department report Friday. That compared with the 580,000 median estimate of economists surveyed by Bloomberg, and reflected a decline of 147,000 in temporary Census workers.

The unemployment rate fell to 6.9 per cent from 7.9 per cent, a bigger decline than economists projected.