October’s ADP report shows solid hiring and job-changers’ wage growth accelerating to its fastest pace since March 2024
The US labor market offered fresh evidence of stabilization Wednesday, as private employers beat analyst expectations for the second consecutive month, according to the ADP National Employment Report.
Private-sector employment rose by 86,000 jobs in October, ahead of the Dow Jones estimate of 75,000, with gains spread broadly across service industries.
The result arrives after a summer defined by faltering private-sector job creation raised questions about the durability of hiring momentum.
September’s total was revised to 86,000 from an initially reported 90,000, a downward correction that leaves October’s reading flat from the prior month in absolute terms, though the beat against consensus carries its own directional signal.
Services sector drives growth as professional jobs contract
The service sector produced 82,000 of October’s total additions.
Trade, transportation, and utilities led at 39,000 new positions, followed by education and health services at 28,000, leisure and hospitality at 19,000, and financial activities at 15,000.
Construction added 13,000 on the goods-producing side.
Professional and business services shed 27,000 jobs, the third consecutive monthly contraction in that segment, while natural resources and mining fell by 8,000.
Mid-sized firms employing between 50 and 499 workers led by establishment size with 33,000 net additions.
The South contributed more than half of October’s national total at 47,000 positions, with the West South Central division alone responsible for 35,000.
For mortgage brokers who have been tracking monthly ADP data throughout 2026 for signals on the Federal Reserve’s rate trajectory, October’s broad-based showing offers a steadier picture than earlier months, without suggesting the breakout momentum that would reopen rate-hike discussions.
Pay gains and what they signal for the mortgage market
Wage data in the October report gives brokers a clearer lens on borrower purchasing power.
Base pay for all private-sector workers rose 3.2% year over year, while gross pay climbed 4.7%. Workers who changed jobs fared markedly better: base pay rose 4.8% and gross pay surged 7.6%, supported by bonuses, overtime, and expanded hours.
“Employers of all sizes were hiring last month, and our data suggests that job-changers were lured by a combination of bonuses, overtime, and more hours in addition to higher base pay,” said Dr. Nela Richardson, chief economist at ADP.
“Taken together, earnings growth for these workers hit its fastest pace since March 2024.”
The Bureau of Labor Statistics (BLS) reported Tuesday that job openings outnumbered unemployed Americans at a ratio of 1.06 to 1 in September — up from 1.02 in August — adding further weight to the case for a prolonged Federal Reserve hold rather than near-term policy easing.
The BLS nonfarm payrolls report, due Friday, is forecast by economists surveyed by Dow Jones to show a total gain of 59,000 in October, with the unemployment rate holding at 4.2%.
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