On Wednesday, ADP announced that private sector job growth experienced a significant jump in October, reaching its highest level in over a year, despite facing challenges from a severe storm season and substantial labor disruptions in the Southeast region.
According to the payroll processing firm, there were 233,000 new positions created in October, surpassing the adjusted 159,000 jobs added in September and outpacing the Dow Jones estimate of 113,000. This marks the most robust month for job growth since July 2023.
“The job market showed impressive strength in October, even amid recovery efforts from hurricanes,” commented Nela Richardson, ADP’s chief economist. “As the year comes to a close, U.S. employment continues to display remarkable strength and resilience.”
These figures validate expectations that economic activity could slow down in October due to the impact of two major hurricanes, Helen and Milton, which primarily affected Florida and North Carolina.
Moreover, labor disruptions involving dock workers and the ongoing Boeing strike, which has affected 33,000 employees since September 13, are also expected to influence employment statistics, with some economists anticipating an atypical result for October that Federal Reserve officials might overlook in their upcoming meeting.
Nevertheless, the ADP report indicates that the job market remains robust. Alongside the rise in employment, wages have also increased by 4.6% compared to the previous year.
Additionally, job growth spanned multiple sectors, including education and health services (adding 53,000 jobs), trade, transportation, and utilities (51,000 jobs), as well as construction, leisure and hospitality (each contributing 37,000 jobs), and professional and business services (3 jobs). In total, the number of job seekers grew by 1,000.
The manufacturing sector was the exception, reporting a decline of 19,000 jobs due to the impact of the Boeing strike.
Job creation was primarily concentrated among larger firms, with those employing 500 or more workers accounting for a total increase of 140,000 jobs. In contrast, smaller companies with fewer than 50 employees saw minimal changes, contributing just 4,000 jobs overall.
ADP reports are typically aligned with the more closely monitored nonfarm payroll figures released by the Bureau of Labor Statistics (BLS). The upcoming BLS report, set to be released on Friday, is expected to show an increase of just 100,000 jobs while keeping the unemployment rate steady at 4.1%.
It’s important to note that ADP and BLS figures can vary significantly, with the latter including government employment in its totals. According to the BLS, private sector employment rose by 223,000 in September, while overall employment increased by 254,000.
Correction: The employment figures related to nonfarm jobs are provided by the Bureau of Labor Statistics. Previous versions of the report mistakenly named the agency.
