Private sector job growth increases less than expected in October: ADP
Job growth rises less than expected in October, ADP report shows
Could we see an ugly turn of events in the jobs market?
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Hiring by U.S. companies increased less than expected in October, the latest sign that the labor market is starting to cool in the face of higher interest rates, according to the ADP National Employment Report released Wednesday morning.
Companies added 113,000 jobs last month, below the 150,000 gain that economists surveyed by Refinitiv predicted but higher than the unrevised 89,000 increase recorded in September.
The weaker-than-expected report comes in the wake of an aggressive tightening campaign by the Federal Reserve, which has hiked rates to the highest level since 2001. Fed officials, including Chair Jerome Powell, have opened the door to at least one more hike this year – and have signaled that rates will remain elevated for longer as they assess whether high inflation has retreated for good.
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Workers replace power lines in Monterey Park, California, early on Oct. 6, 2023. ((Photo by FREDERIC J. BROWN/AFP via Getty Images) / Getty Images)
In a potentially welcoming sign for the Fed as it tries to wrangle inflation under control, wages continued to moderate in October.
Annual pay rose 5.7% last month, the 13th straight month of slowing growth, according to the report. For workers who switched jobs, wages climbed 8.4%, down from 9% the previous month.
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"No single industry dominated hiring this month, and big post-pandemic pay increases seem to be behind us," said Nela Richardson, ADP chief economist. "In all, October’s numbers paint a well-rounded jobs picture. And while the labor market has slowed, it’s still enough to support strong consumer spending."
The education and health services industry drove the biggest job gains last month, adding 45,000 new employees. But hiring was largely broad-based last month, and there were also notable gains in other sectors including leisure and hospitality, financial activities and trade, transportation and utilities.
Elementary school educators gather to talk to prospective hires during a hiring event for Prince George's County school district hosted at Dr. Henry A. Wise Jr. High School in Upper Marlboro, Maryland, on Aug. 2, 2023. ((Amanda Andrade-Rhoades/For The Washington Post via Getty Images) / Getty Images)
The gains helped to offset losses in natural resources and mining and in the professional and business services sector.
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The data precedes the release of the more closely watched October jobs report from the Labor Department on Friday morning, which is expected to show that employers hired 180,000 workers following a gain of 336,000 in September. The unemployment rate is expected to hold steady at 3.8%.
ADP numbers can differ drastically from the official government count and have historically been an unreliable indicator of what's to come.