Private payroll growth held strong in October while worker wages also rose, particularly in the leisure and hospitality industry, according to a report released Wednesday from payroll processor ADP.
Companies added 239,000 positions for the month, ahead of Dow Jones’ estimates of 195,000 and better than the downwardly revised figure of 192,000 in September. Wages increased 7.7% year over year, down 0.1 percentage point from the previous month.
Job gains were particularly strong in the pivotal leisure and hospitality sector, which added 210,000 jobs while wage growth accelerated 11.2%. The industry, which includes hotels, restaurants, bars and related businesses, is seen as a leader as it has absorbed the toughest Covid and is still below pre-pandemic levels.
All of the job growth came from service-related industries, which added 247,000 jobs, while goods-producing sectors lost 8,000 jobs, largely due to the loss of 20,000 manufacturing jobs. Trade, transportation, and utilities increased by 84,000.
“This is a really strong number given the maturity of the economic recovery, but employment has not been extensive,” said Nella Richardson, ADP’s chief economist. “Commodity producers, affected by interest rates, are pulling back, and job changers are making smaller wage gains. And while we’re seeing early signs of Fed-driven demand destruction, it’s only affecting certain sectors of the labor market.”
The Federal Reserve has been raising interest rates in an attempt to cool inflation, which is approaching its highest level in more than 40 years. A primary goal is a historically tight labor market, where job opportunities outnumber available workers by an almost 2-to-1 margin.
While the headline ADP number was strong, the details looked weaker.
Along with the decline in construction jobs, information (17,000), professional and business services (-14,000), and financial activities (-10,000) also showed losses.
By turnover, companies with 50 to 249 employees made nearly all of the gains, adding 241,000.
The ADP report comes two days before the closely watched non-farm payroll count from the Bureau of Labor Statistics. This report is expected to show a growth of 205,000, from 263,000 in September.
“Web maven. Infuriatingly humble beer geek. Bacon fanatic. Typical creator. Music expert.”
The Dow fell 530 points as banks led the Fed’s sell-off; Apple, 5 Titans mask market weakness
Equity investors are trading cautiously ahead of the Fed’s interest rate decision
4 reasons to hike, 4 reasons to get up for a walk