The October jobs report was a blowout.

Data showed that the US economy added 271,000 jobs in October. It was the strongest pace of employment growth this year and nearly 100,000 jobs above the consensus forecast for 182,000.

The unemployment rate dropped to 5%, its lowest level since 2008. Economists consider a 5% rate to indicate full employment. The labor-force participation rate stayed at a 38-year low, with just 62.4% of American civilians over the age of 16 working or looking for work.

Wages grew at their fastest pace since mid-2009, as average hourly earnings rose 0.4% month-on-month, better than forecast. Compared to last October, earnings rose 2.5%.

The report had been expected to show a modest rise in the pace of jobs growth, following the unexpected slump we saw over the past two months. In ​the report, September nonfarm payrolls were revised even lower to 137,000 from 142,000.

Earlier this week, Fed chair Janet Yellen reiterated that a rate hike next month was "a live possibility" if economic data pointed to a stronger labor market and rising inflation.

This jobs report was then closely watched as an indicator of how close the labor market was to achieving the Fed's goals.

"In one line: Normal service resumed, plus wage gains = December hike," Pantheon Macroeconomics' Ian Shepherdson wrote in a client note. "After two inexplicably weak months — Aug/Sep still hard to explain — this is consistent with all the advance indicators."

The persistently low levels of initial jobless claims and gains in service-sector employment were among the indicators some economists found contradictory to the weak jobs reports.

Manufacturing employment was unchanged, beating expectations for a decline by 4,000 amid a slowdown in the sector.

Following the release, stock futures tumbled, and Dow futures lost as many as 70 points. The two-year yield, which is very sensitive to interest-rate expectations, spiked 7 basis points to as high as 0.92%.