Private payrolls added 571K in October, beating expectations
U.S. private sector businesses beat market expectations by adding 571,000 workers in October, according to a Wednesday report released by payroll processor ADP.
Economists expected U.S. private payrolls to add roughly 400,000 last month as the U.S. continued to shake off the stifling impact of COVID-19’s delta variant, which cratered job growth throughout the summer as case numbers soared.
ADP, however, reported solid gains across industries and business sizes, with a stellar 185,000 of the added jobs coming from the hard-hit leisure and hospitality industry. The service sector broadly gained 458,000 jobs, while the goods sector added 113,000 jobs.
“The labor market showed renewed momentum last month, with a jump from the third quarter average of 385,000 monthly jobs added, marking nearly 5 million job gains this year,” said Nela Richardson, chief economist at the ADP Research Institute.
“Service sector providers led the increase and the goods sector gains were broad based, reporting the strongest reading of the year. Large companies fueled the stronger recovery in October, marking the second straight month of impressive growth.”
The strong ADP report comes two days before the Labor Department is set to release its monthly jobs report for October, which covers both public and private sector employment.
Analysts expect the U.S. to have added roughly 450,000 jobs in October, a notable gain from September’s lackluster gain of 194,000 jobs. While the consensus estimate for the Friday jobs report is already below ADP’s analysis of private payrolls, the two reports have diverged greatly during the pandemic.
The strong ADP report was one of several encouraging glimpses into the economy released shortly before the federal numbers.
The Institute for Supply Management’s index for U.S. service sector activity jumped 4.8 percentage points to a record high of 66.7 percent in October. Even so, while activity grew in the retail, transportation and warehousing industries, supply constraints and price pressure restrained employment slightly.
“Services will post solid gains into 2022, while stubborn supply-chain headwinds drag the recovery but don’t strengthen enough to throw it off course,” wrote Oren Klachkin of Oxford Economics in a Wednesday analysis.
“Though policy makers and business leaders are working to unclog supply chains, it will take time to return to pre-Covid conditions.”
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.