Weekly job gains may influence the Fed’s next move on rates
The United States labor market showed tentative signs of recovery in October according to new data released by payroll giant ADP, whose weekly estimates of private-sector job growth are filling a gap left by delayed government reports.
ADP’s preliminary figures indicated that private employers added an average of 14,250 jobs per week over the four weeks ending October 11.
“This growth in employment suggests that the US economy is emerging from its recent trough of job losses,” Nela Richardson, chief economist at ADP, said.
“Hiring has begun to increase from September levels, albeit slowly and without the positive momentum we saw earlier in the year. This tepid recovery could support economic growth, however, because our run of week-over-week job losses seems to have been relatively short-lived."
ADP steps in as official data stalls
The new weekly release, which ADP said will be published every Tuesday, comes as the US government shutdown continues to disrupt the release of official labor data.
With the Bureau of Labor Statistics sidelined, ADP’s data has become a critical resource for market watchers and policymakers seeking real-time insight into employment trends.
The shift to weekly reporting marks a significant change for ADP, which has published monthly payroll data since 2010. The company’s new cadence is designed to provide a “dynamic view of job creation and loss at an unprecedented level of weekly detail,” Richardson said.
The preliminary numbers, which will be revised with the monthly National Employment Report, suggest a modest rebound from the 32,000 private-sector jobs lost in September.
Fed weighs rate cut amid uncertainty
Mortgage and housing sectors remain sensitive to labor market shifts, with employment trends closely watched as a leading indicator for homebuyer confidence and loan demand.
The Federal Reserve is expected to cut rates again, but the decision is complicated by missing government data and mixed market signals.
ADP’s modest job growth numbers could encourage the Fed to lower rates to support the economy, but officials are likely to remain cautious and avoid any drastic moves.
With official reports delayed, the Fed will likely rely on ADP’s weekly figures to guide its decision, keeping in mind that the recovery remains fragile.
“We may see more disagreement among Fed members this time, partly due to the government shutdown,” Sam Williamson, senior economist at First American, told Mortgage Professional America.
"With no fresh employment data because of the shutdown, the Fed is operating with limited visibility. That uncertainty could lead some members to argue for holding rates steady, while others push for a more aggressive cut, despite the lack of data. With no November meeting, markets expect a cautious cut in October, which may serve as a hedge against uncertainty that buys time for clearer signals to emerge.”
ADP’s October National Employment Report is scheduled for release on November 5, with weekly estimates continuing through the end of the year.
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