US companies added 239,000 jobs in October, better than expected: ADP
Economists expected private payrolls to grow by 195,000 in October
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Private payroll job growth rose faster than expected in October, suggesting that companies are continuing to hire new workers despite growing fears of an economic slowdown, according to the ADP National Employment Report released Wednesday morning.
Companies added 239,000 jobs last month, beating the 195,000 gain that economists surveyed by Refinitiv had predicted and better than the downwardly revised gain of 192,000 in September.
The hiring increase came even as goods-producing industries reported a loss of 8,000 jobs. The manufacturing sector accounted for the bulk of those losses, shedding 20,000 jobs last month. That was offset by gains of 11,000 in natural resources in mining, and a gain of 1,000 in the construction industry.
Service-providing industries, meanwhile, saw payrolls jump by 247,000 in October, with the gains stemming from just two sectors: leisure and hospitality, which added 210,000 new jobs, and trade, transportation and utilities, which saw payrolls grow by 84,000.
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Bay Shore, N.Y.: A large "Now Hiring" advertisement posted on the windows of the Advance Auto Parts store in Bay Shore, New York on March 24, 2022. ((Photo by Steve Pfost/Newsday RM via Getty Images) / Getty Images)
Every other sector saw job losses last month, with information shedding the most at 17,000. That was followed by professional/business services (-14,000), financial activities (-10,000) and education and health services (-5,000).
"This is a really strong number given the maturity of the economic recovery, but the hiring was not broad-based," said Nela Richardson, chief economist at ADP. "Goods producers, which are sensitive to interest rates, are pulling back, and job changers are commanding smaller pay gains. While we’re seeing early signs of Fed-driven demand destruction, it’s affecting only certain sectors of the labor market."
By size, hiring accelerated predominantly at medium businesses that employ between 50-499 workers, which saw a gain of 218,000 last month. Small businesses, which have struggled the most with the worst inflation in four decades, onboarded 25,000 new workers. Large businesses saw a decline of 4,000.
Gas prices listed at a petrol station in Los Angeles, California on July 19, 2022. (Frederic J. Brown/AFP via Getty Images) (Frederic J. Brown/AFP via Getty Images / Getty Images)
The red-hot labor market did lose some steam in October, with wages increasing 7.7% on an annual basis — down 0.1% from September, according to the report, which is now conducted alongside Stanford Digital Economy Lab.
The Fed has responded to the inflation crisis and the extremely tight labor market by raising interest rates at the fastest pace in decades. Officials approved three consecutive 75-basis-point rate hikes in June, July and September, and are expected to approve another increase of that magnitude at the conclusion of their meeting on Wednesday.
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The data precedes the release of the more closely watched October jobs report on Friday morning, which is expected to show that employers hired 200,000 workers following a gain of 263,000 in September. The unemployment rate is expected to tick up to 3.6%.