Private sector businesses boosted employment by 42,000 jobs in October, while annual pay rose 4.5% year over year, payroll giant ADP
The report provides important data on hiring as the government shutdown continues, with the U.S. Bureau of Labor Statistics not expected to provide its monthly jobs report on Friday.
The 42,000 jobs added in October represented a rebound from the revised negative total of 29,000 jobs lost in September. Nevertheless, there were concerning signs in this latest report, including a loss of 15,000 jobs in the professional and business services sector, which includes accounting, tax preparation and other types of services.
Even though last month delivered a rebound from two months of weak hiring, the bounce wasn't broad-based, ADP noted. Education and health care, and trade, transportation, and utilities led the growth. For the third month in a row, employers shed jobs in professional and business services, information, and leisure and hospitality. Overall, the service-providing sector added 33,000 jobs, while the goods-producing sector added only 9,000 jobs.
"While we cheer positive job gains in the month of October, we note that the hiring is a slowdown from what we reported earlier this year, and more concentrated," ADP chief economist Nela Richardson said during a press conference call Wednesday.
Small businesses with between one and 19 employees lost 15,000 jobs in October, while those with between 20 and 49 employees gained 6,000 jobs. Medium establishments with between 50 and 249 employees lost 25,000 jobs, while those with between 250 and 499 employees gained 3,000 jobs. Large companies with 500 employees or more added 73,000 jobs.
Year-over-year pay growth was flat in October from the previous month, at 4.5% for people who stayed at their jobs and 6.7% for job changers. In the professional and business services sector, the pay gains were 4.2% for job stayers.
"The difference — what we call the wage premium — between job changers and job stayers is 2.2%, and it's been below 3% for the last two years," said Richardson. "That tells you a couple of things. First, job growth is still relatively robust for this unique match sample of employees that encompasses over 15 million workers, but the premium to switching jobs has narrowed, and has narrowed for a bit of time now. And so the incentive to change jobs in this hiring environment is low for U.S. workers."
ADP is beginning to present its
"It gives all of us almost a real-time view, as real time as payroll can get, on the labor market," said Richardson. "And this is important, because we're not just talking about cyclical, short-term fluctuations in hiring. There is a cacophony of different drivers now driving U.S. employment, from AI innovation to demographic change to policy uncertainty to global dynamics."
