ADP October Payroll Report: Private sector payroll growth showed modest improvement in October but fell short of expectations, indicating a possible dimming employment landscape, according to ADP’s report on Wednesday.
The payrolls processing firm highlighted an addition of 113,000 employees during the month, surpassing the unrevised figure of 89,000 in September but failing to meet the Dow Jones consensus estimate of 130,000.
Regarding wages, ADP noted a 5.7% increase from a year ago, representing the smallest annual gain since October 2021.
From a sector perspective, education and health services led the way with 45,000 new positions. Noteworthy gains were also observed in trade, transportation, and utilities (35,000), financial activities (21,000), and leisure and hospitality (17,000).
Almost all job growth originated from service-providing industries, with goods producers contributing a meager 6,000 to the overall count.
Firms with 50 to 499 employees made the most substantial contribution, adding 78,000 jobs.
ADP’s chief economist, Nela Richardson, emphasized the absence of a dominant hiring sector for the month, suggesting that significant post-pandemic wage increases are now in the past. Richardson commented, “In all, October’s data present a comprehensive employment landscape. While the labor market has slowed, it still supports robust consumer spending.”
The report precedes the Labor Department’s nonfarm payrolls report, scheduled for release in two days, which is anticipated to reveal a growth of 170,000 jobs, encompassing government positions, unlike ADP. Discrepancies between ADP’s and the government’s data can be significant, as evidenced in September when the Labor Department reported an increase of 336,000 jobs, more than triple ADP’s estimate.
In other related news on Wednesday, the Labor Department indicated that its closely monitored Job Openings and Labor Turnover Survey remained relatively stable in September.
Job openings amounted to 9.55 million for the month, marginally exceeding the downwardly revised figure from August. Market projections had anticipated a total of 9.5 million, according to a FactSet estimate. This resulted in the ratio of job openings to available workers remaining at 1.5 to 1, mirroring the ratio observed in August.
Levels for employee departures and new hires exhibited marginal changes, while the layoff rate saw a slight decline.
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