The private sector in the U.S. added fewer jobs than expected in October, according to the latest ADP National Employment Report released on Wednesday morning. The monthly report is compiled using payroll processor ADP’s actual payroll data in collaboration with Moody’s Analytics to measure the change in total nonfarm private employment on a seasonally-adjusted basis.
ADP said that private sector employment increased by 130,000 jobs during the month, short of the 150,000 that economist expected. October’s figure was the smallest since only 124,000 jobs were added in April and second-lowest total in the past 12 months. Meanwhile, the gains for September were revised downward from 166,000 new jobs to 145,000.
October featured chaos in the nation’s Capitol, including a 16-day partial government shutdown. The tensions in Washington kept employers at bay from increasing staff and may continue to do so throughout the rest of the year as solutions to budget conflicts will have to be agreed upon at the start of 2014.
"The government shutdown and debt limit brinksmanship hurt the already softening job market in October. Average monthly growth has fallen below 150,000. Any further weakening would signal rising unemployment. The weaker job growth is evident across most industries and company sizes,” said Mark Zandi, chief economist of Moody’s Analytics, in the report.
The services industry added 107,000 jobs in October, down from 130,000 in September. Within that industry, the trade/transportation/utilities segment added the most jobs with 40,000 new hires, while financial activities lost 5,000 jobs.
Goods-producing companies added 24,000 jobs in October, up from 16,000 in September. Construction jobs were up by 14,000 and manufacturing payrolls rose 5,000.
Growth at small businesses (those will less than 49 employees) slowed to add 37,000 new jobs after ADP reported 74,000 additions in the category in September. Medium-sized businesses (50-499 employees) added 13,000 jobs, while large businesses (500+ employees) added 81,000 jobs.
Across the past six months, the ADP report has generally been higher than employment situation report, perhaps setting an ominous tone for the next report from Washington on the country’s labor market. Last week, the Labor Department reported that the U.S. added 148,000 jobs in September, well short of the 180,000 economists expected. As aforementioned, ADP originally estimated 166,000 new jobs.
Wall Street is looking to open in the green again on Wednesday, continuing a strong rally that has by large ignored contention in Washington and cheered the idea that the Federal Reserve will likely continue with its economic stimulus package. The Dow Jones Industrial Average is looking to print new record highs, closing on Tuesday at 15,680.35, only 29 points short of the all-time intraday record.
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