With no BLS data, ADP’s report offers rare insight into US employment market health
With the Bureau of Labor Statistics sidelined by the government shutdown, the October ADP National Employment Report became a rare window into the state of the United States labor market—one that Federal Reserve officials are watching closely as they weigh their next moves.
Private sector employers added 42,000 jobs last month, a modest rebound after two months of losses, according to the ADP report produced with the Stanford Digital Economy Lab.
“Private employers added jobs in October for the first time since July, but hiring was modest relative to what we reported earlier this year,” Dr. Nela Richardson, ADP’s chief economist, said.
“Meanwhile, pay growth has been largely flat for more than a year, indicating that shifts in supply and demand are balanced.”
Large firms drive job gains, small businesses struggle
The report showed that all job growth came from companies with more than 250 employees, which added 76,000 positions. In contrast, small businesses lost 34,000 jobs.
Small businesses, typically the main engine of job creation, continued to show weakness—a trend that remains a concern and has contributed to the slow pace of recovery.
Sector-wise, trade, transportation and utilities led with a gain of 47,000 jobs, while education and health services followed with 26,000. However, professional and business services, information, and manufacturing all posted losses, reflecting ongoing challenges in those areas.
Flat pay growth and Fed concerns
Year-over-year pay growth for job-stayers held steady at 4.5%, while job-changers saw a 6.7% increase. Despite these gains, the pace of pay growth has plateaued, echoing broader concerns about the labor market’s resilience.
Federal Reserve officials, who recently announced another 25-basis-point cut to the federal funds rate, have signaled that labor market health is now a primary focus, especially with inflation still running above target.
Some Fed officials also expressed uncertainty about cutting rates in December, citing ongoing inflation, a slowing job market, and missing economic data from the government shutdown.
Layoffs and broader market anxiety
The ADP report’s relative optimism was tempered by ongoing layoffs at major corporations, as tracked by Challenger, Gray & Christmas, and a continued slump in job postings, according to Indeed.
The lack of official BLS data has left economists and policymakers relying on private sector reports and state-level jobless claims to gauge the true state of employment.
The October jobs data, while better than feared, underscored a market in flux—one where headline numbers mask deeper weaknesses, especially among small businesses.
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