Economy adds 118,000 jobs despite hurdles

"The manufacturing, retailing, leisure and hospitality and temporary help industries were hit particularly hard by the storm."

Despite all of the hurdles, "businesses appear to be holding firm on their hiring and firing decisions."


The October report was revised down to 157,000 from gains of 158,000.

Zandi said businesses have pulled back on their investment and advertising rather than jobs because of the looming tax and spending issues. 


"I don't see any sign that businesses are changing their behavior because of fiscal cliff issues," he said. 

The storm hit smaller businesses particularly hard, but Zandi said he expects jobs to bounce back this month. 

He said large companies have been increasing their payrolls at a "disproportionately" high pace and are doing "relatively" well compared with smaller-sized firms. 

Although manufacturing jobs fell, the construction sector added 23,000 positions, while trade and transportation tacked on 22,000.

The ADP report comes two days ahead of the Bureau of Labor Statistics release on Friday, which covers public and private payrolls. 

Because of Sandy, Zandi expects the figure to hit closer to 100,000, although underlying job growth was around 150,000 and could have posted even stronger numbers without the storm, a testament to its severity. 

Business groups have expressed concern about the delay in solving the "fiscal cliff" issues of spending cuts and tax increases.

At the moment, the White House and congressional Republicans seem far apart on an agreement, with the central issue remaining whether to let tax rates go up for wealthier taxpayers.

This story was updated at 8:50 a.m.