The economy added 161,000 jobs in October as payroll gains fell short of estimates in the final employment report before the presidential election, but wage growth accelerated.

The unemployment rate fell to 4.9% from 5% as the number of Americans working or looking for jobs declined, the Labor Department said Friday,

Economists expected 175,000 job gains, according to a Bloomberg survey.

Businesses added 142,000 jobs. Federal, state and local governments added 19,000.

More encouraging is that job gains for August and September were revised up by a total 44,000. August’s was revised to 176,000 from 167,000, and September’s to 191,000 from 156,000.

Also, average hourly wages rose 10 cents to $25.92 and are up 2.8% the past year, the biggest annual jump in seven years, Wage growth finally seems to be accelerating as the low unemployment rate forces employers to bid up to attract a smaller pool of available workers. Higher wage gains,which is likely to fuel stronger inflation, could solidify the Federal Reserve’s expected decision to raise interest rates in December for the first time this year.

"Employers have jobs they cannot fill and what we're seeing now is inevitable – an increase in wages to attract workers," says Patrick O'Keefe, director of economic research at CohnReznick accounting and consulting and Labor's former deputy assistant secretary. .

Job growth has slowed in 2016 from last year’s average monthly pace of 229,000. Many economists say the trend is normal in light of a near-normal unemployment rate that’s translating into fewer job candidates and slower hiring.

In recent months, Fed officials have been more focused on an unemployment rate that’s been stagnant at about 5% this year as many discouraged workers on the sidelines streamed back into an improving labor market.

Fed Chair Janet Yellen has said she wants to encourage that positive trend -- which has tempered wage growth and inflation -- by keeping interest rates lower a bit longer. Yet the latest report could signal that wage gains are picking up, putting more pressure on the Fed to act next month.

With productivity, or output per worker stagnant, "Hourly wage growth points to a rise in price inflation above the Fed's 2% (annual) target," economist Paul Ashworth of Capital Economics wrote in a note to clients.

Some economists warned of potentially sluggish payroll growth in October, partly because of Hurricane Matthew, which hit the Southeast early in the month. The number of workers who weren't at job sites because of weather increased by 214,000 in October, well above a typical 10,000 in October, notes economist Jim O'Sullivan of High Frequency Economics.

Another positive sign in the report: A broader measure of joblessness -- that includes part-time workers who prefer full-time jobs, discouraged workers who have given up job hunts and the unemployed -- fell to 9.5% from 9.7%.

Other labor market indicators have been mixed. Payroll processor ADP estimated businesses added just 147,000 jobs last month. And a measure of October hiring in a closely watched service-sector survey fell sharply.

Yet initial jobless claims -- a good barometer of layoffs -- remain near 40-year lows. And the employment index of a manufacturing activity survey climbed higher October, a possible sign the sector is recovering from the oil slump and a strong dollar that hammered exports.

Economic growth picked up to a solid 2.9% annual rate in the third quarter after nine weak months, but consumer spending increases moderated.

Some business surveys have suggested hiring and investment has been restrained by uncertainty related to Tuesday’s election.