“The labor market showed renewed momentum last month, with a jump from the third quarter average of 385,000 monthly jobs added, marking nearly 5 million job gains this year,” Nela Richardson, ADP chief economist, said in a statement.
While there was an encouraging acceleration in small-business hirings at 115,000, large firms led the gains at 342,000; mid-sized businesses added 114,000 jobs.
“Service sector providers led the increase and the goods sector gains were broad-based, reporting the strongest reading of the year. Large companies fueled the stronger recovery in October, marking the second straight month of impressive growth,” Richardson said.
Leisure and hospitality accounted for the bulk of the gains, adding 185,000 jobs, followed by professional and business services at 88,000.
While differences in methodology mean there’s often a weak correlation between ADP employment data and the Bureau of Labor Statistics’ (BLS) closely watched nonfarm payrolls report, which is due on Nov. 5, the ADP data serve as a barometer of labor market health and is often looked to as a predictor of the government’s official job creation statistics.
September’s ADP report indicated that employers added 568,000 jobs—which has been revised down in the current report to 523,000—while September’s BLS figures came in at a lackluster 194,000.
“Disguising it as ‘labor shortages’ is simply a joke. A dreadful 194,000 jobs were gained versus 500,000 expected in nonfarm payrolls in September with the labor force falling by 183,000, leaving it still 3 million below pre-pandemic levels. The report shows that the economy has seen 15 months of a stagnant labor participation rate of 61.6 percent,” Lacalle wrote.
Bankrate Chief Financial Analyst Greg McBride told The Epoch Times in an emailed statement that he expects the FOMC to announce that it will start tapering in November.
“Dialing down their $120 billion in monthly purchases in $15 billion increments—reducing purchases of Treasuries by $10 billion and mortgage-backed securities by $5 billion per month—gets them done by the end of June,” McBride said.
Investors will also keep a close eye on the Fed’s policy announcement following the conclusion of the FOMC meeting for any hints about the timing and extent of interest rate hikes.