Economic Report: U.S. hiring revs up as private sector adds 571,000 jobs in October, ADP finds
The numbers: Privately run U.S. businesses created a fairly strong 571,000 new jobs in October, an ADP survey found, in a sign companies are still managing to find workers despite the biggest labor shortage in decades.
The increase in hiring was larger than expected. Economists surveyed by The Wall Street Journal had forecast a 395,000 gain.
ADP sometimes acts as a preview for U.S. Labor Department’s broader employment survey that comes out a few days later. Yet the two reports have often been at odds during the pandemic and ADP has been less reliable as a bellwether.
Big picture: The pace of hiring is still too slow to fully meet the needs of businesses and keep the economy humming. More than 10 million open jobs are available and a lack of workers has prevented many companies from producing enough goods and services to meet demand.
The hope is that more people will be drawn back into the workforce owing to a fading pandemic, the end of emergency unemployment benefits and rising wages.
Yet so far there’s been little evidence of that. The share of people working or looking for a job is at the lowest level since the late 1970s.
Key details: Once again the biggest increase in hiring took place in leisure and hospitality. These businesses created 185,000 jobs.
Falling coronavirus cases tied to the highly contagious delta variant has given Americans the confidence to go outside again and spend more freely at restaurants, hotels and the like.
Hiring was also robust in transportation, construction, manufacturing and professional jobs.
Large companies led the way, adding some 342,000 workers. Mid-sized businesses created 114,000 jobs and small businesses generated 115,000 jobs.
“The job market is revving back up as the delta-wave of the pandemic winds down,” said chief economist Mark Zandi at Moody’s Analytics, whose firm helped develop the ADP report. “As long as the pandemic remains contained, more big job gains are likely in coming months.”
The U.S. Labor Department on Friday is expected to report the economy added 450,000 new jobs in October, economists predict. These figures include employment at local, state and the federal government.
Economists say two straight 500,000-plus readings in ADP’s employment could be a sign the Labor Department report will also be stronger.
ADP said a revised 523,000 jobs were created in September, down slightly from the original reading.
What they are saying? “If job growth is to pick up from its recent slowdown and the labor market is to return to its pre-pandemic state, more previously employed workers need to return to the job market,” said chief economist Gus Faucher of PNC Financial Services.
Market reaction: The U.S. stock market
fell in early Wednesday trades, but it remained near record highs.