Last Updated: Nov. 1, 2023 at 9:20 a.m. ET
First Published: Nov. 1, 2023 at 8:19 a.m. ET
The numbers: Businesses in the U.S. created just 113,000 new jobs in October, payroll processor ADP said, in a potential sign of a slackening labor market.
Economists polled by the Wall Street Journal had forecast a 130,000 increase.
The ADP payroll estimate can offer clues on the strength of the labor market, but it’s not an accurate predictor…
The numbers: Businesses in the U.S. created just 113,000 new jobs in October, payroll processor ADP said, in a potential sign of a slackening labor market.
Economists polled by the Wall Street Journal had forecast a 130,000 increase.
The ADP payroll estimate can offer clues on the strength of the labor market, but it’s not an accurate predictor of the government’s official employment report that follows a few days later.
The government on Friday is expected to report 170,000 new jobs were created in October, including new hires in government. ADP’s report excludes government employment.
Key details: Companies in education and health care added 45,000 jobs last month to lead the way. Hiring also rose in transportation, leisure and hospitality and financial services.
Most of the new jobs were created by midsized businesses in the South and West. Employment in the Midwest declined.
The annual rate of increase in wages, meanwhile, slowed again.
Those who stay in the same job gained a 5.7% increase in pay in the last 12 months, down from 5.9% in the prior month. That’s the lowest level in two years.
Job changers saw an 8.4% increase in pay in the last year, down from 9%.
ADP’s estimate of employment growth in September was unchanged at 89,000. The government’s official jobs report, on the other hand, showed a much larger 336,000 gain in September.
Economists don’t think the labor market was as weak as ADP found or as strong as the Labor Department reported.
Big picture: The labor market may have softened a bit, but it’s still quite strong. Layoffs are near record lows and the unemployment rate is only 3.8%.
Normally, that is great news. Yet the Fed would like to see slower growth in hiring and wages to help the central bank in its effort to reduce inflation.
Looking ahead: “October’s numbers paint a well-rounded jobs picture. And while the labor market has slowed, it’s still enough to support strong consumer spending,” said Nela Richardson, chief economist of ADP.
Market reaction: The Dow Jones Industrial Average
DJIA
and S&P 500
SPX
were set to open lower in Wednesday trades.
Jessica Roberts is a seasoned business writer who deciphers the intricacies of the corporate world. With a focus on finance and entrepreneurship, she provides readers with valuable insights into market trends, startup innovations, and economic developments.
