The U.S. economy added 261,000 jobs in October and the unemployment rate was 4.1 percent as labor conditions returned to normal following the storm-weakened September.

However, the jobs-creation number was considerably below Wall Street expectations of 310,000. The tick lower in the unemployment rate came against expectations it would hold at 4.2 percent.

A broader measure of joblessness that includes discouraged workers and those at work part -time for economic reasons fell sharply, from 8.3 percent to 7.9 percent after being at 9.5 percent just a year ago.

In addition to the October growth, an initially reported decline of 33,000 for September was revised up to a gain of 18,000. August's count also was revised up from 169,000 to 208,000.

"Today's report, albeit a little bit mixed, is still a relatively decent number. It still points towards the positive trend that we've seen in payroll growth over the last several months and the last couple of years actually," said Tony Bedikian, head of global markets at Citizens Bank. "In general, the economy is moving along, though a little softer than many market participants anticipated."