Despite the Federal Reserve’s efforts to cool down the labor market, payroll growth accelerated in October, according to payroll company ADP.
Private payrolls in the U.S. grew by 239,000 in October, up from 192,0000 in September, the ADP National Employment Report showed Wednesday. The September gain was revised down from the preliminary estimate of 208,000.
The report came in higher than expected. Economists had forecast a gain of 200,000 jobs.
Job creation was uneven and concentrated in bars, restaurants, and hotels. Manufacturing payrolls declined by 20,000. Leisure and hospitality jobs grew by 210,000.
“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.”
Miners, including oil and natural gas producers, added 11,000 jobs. The construction sector added 1,000. Trade, transportation, and utilities added 84,000.
There have been reports of layoffs at tech and financial companies and those showed up in the October ADP data. Information technology payrolls shrank by 17,000. Financial services contracted by 10,000. Professional and business services payrolls declined by 14,000. Education and health fell by 5,000.
Medium-sized businesses grew payroll roles at the fastest pace, adding 218,000 workers. Small companies added 25,000 jobs. Companies with 500 or more employees shed an aggregate of 4,000 workers.
Wages continue to rise at a rapid rate. Workers who stayed in their jobs saw wages climb 7.7 percent, more or less unchanged from recent months. Workers who switched jobs have been seeing bigger pay gains. In October, they saw wages climb 15.2 percent from a year ago, down from 15.7 percent in September.
On Tuesday, the government’s report on job openings showed that there were 10.7 million vacancies at the end of September, up from 10.3 million in August. The August figure was revised up from 10 million. The rise in vacancies indicates that rate hikes have not yet cooled off the demand for workers. With 1.9 vacancies for every unemployed person, the labor market is considered extremely unbalanced and inflationary.
The Department of Labor will announce on Friday its estimates for hiring in the U.S. economy. Payrolls are expected to grow by 210,000, down from 263,000 last month. The private sector is seen as adding 200,000 jobs. The unemployment rate is expected to tick up one-tenth of a point to 3.6 percent.
The ADP jobs report no longer attempts to forecast the Department of Labor report. It is now an independent measure of the labor market based on data on 25 million workers from ADP’s clients.
COMMENTS
Please let us know if you're having issues with commenting.