Private employers added 125,000 jobs last month, according to payrolls processor ADP, slightly exceeding economists’ predictions. However, this morning’s ADP National Employment Report showed losses across the goods-producing sector.
“Job growth has throttled way back over the past year,” said Mark Zandi, chief economist of Moody’s Analytics, which produces the report with ADP. “The job slowdown is most pronounced at manufacturers and small companies. If hiring weakens any further, unemployment will begin to rise.”
Where Jobs Are Growing
“While job growth continues to soften, there are certain segments of the labor market that remain strong,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “The goods producing sector showed weakness; however, the healthcare industry and midsized companies had solid gains.”
Many service-providing industries added jobs last month, including:
- Trade/transportation/utilities (+32,000 jobs)
- Health care (+35,000 jobs)
- Leisure/hospitality (+19,000 jobs)
- Professional/business services (+18,000 jobs)
On the goods-producing side, construction, manufacturing and mining all shed jobs in October. The sector lost 13,000 jobs altogether.
Looking Ahead to the Labor Report
Friday’s jobs report from the Bureau of Labor Statistics will show additions to non-farm payrolls and the latest unemployment rate, as well as information on wage growth. Economists surveyed by Reuters predict that the report will show 85,000 jobs added to public and private payrolls — a larger than typical difference between the ADP and BLS reports.
“While the ADP report never directly correlates with the Labor Department’s monthly employment report, the two measures may diverge more than usual this month given differences in accounting for the GM strike,” explained Reade Pickert at Bloomberg. “The ADP data do not reflect the 46,000 direct impact of the walkout.”
Unemployment is expected to tick up to 3.6%, per Reuters. The PayScale Index, which measures the change in pay for employed U.S. workers, showed 2.6% year-over-year wage growth for Q3 2019. However, real wages — the value of workers’ pay with inflation taken into account — have declined 9.6% since 2006.
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