The US Labour Department revealed that nonfarm payrolls rose 80,000 in October, but failing to meet economists' expectations of a gain of 95,000.
However, figures for August and September were revised to show 102,000 more jobs than previously reported. In addition, the decline in the jobless rate from 9.1 percent in September came even as more people entered the labour force.
While job growth last month was less than expected, details of the report suggested the economy was gaining some momentum.
US stock index futures turned positive after the data and US Treasury debt prices fell. The dollar extended losses against the euro.
The labour market is the Achilles heel of the economic recovery, and progress at putting 13.9 million unemployed Americans back to work remains painfully slow.
President Barack Obama faces a tough fight for re-election next year, though signs of a modest improvement could keep the Federal Reserve on the sidelines as it considers whether monetary policy needs to be looser to aid growth.
The US central bank on Wednesday lowered its growth forecasts and raised its projections for unemployment. While the Fed announced no new measures to stimulate the economy, it said it was considering the possibility of additional mortgage debt purchases.
But with fears of another recession receding, the pressure for more monetary policy stimulus has eased somewhat. Europe's debt crisis could, however, push the recovery off the rails.
The debt crisis, which has rattled global financial markets and pushed consumer confidence to recession levels, remains far from being resolved, and investors are keeping a close eye on developments in Greece.