239k Jobs Created in October
The October ADP report was better than expected as job growth continues despite Fed action to loosen up the labor market, according to the latest ADP report.
- Employers created 239,000 jobs in October, up from a revised 192,000 in September.
- Economists projected 192k jobs created in October.
All About Service. There was a big divide between goods and services this month with the service sector adding 247k jobs and the goods sector losing 8k.
- Service: Leisure & hospitality reported 210k new jobs in October followed by trade/transportation/utilities which created 84,000 jobs. Every other category was in the red with professional/business services reporting the biggest drop with 14,000 job cuts.
- Goods: Only one industry was negative but it was enough to pull the whole category down. Manufacturing employment fell 20k in October while natural resources mining was up 11k and construction was up 1k.
Mid-Size FTW. Midsize companies were responsible for 91.2% of the jobs gains this month with 218,000 jobs created. Small businesses added 25,000 jobs and big business lost 4k.
Analysis. Nela Richardson, ADP Chief Economist, said that we are seeing some small signs that Fed action may be starting to impact some sectors of the economy. “This is a really strong number given the maturity of the economic recovery, but the hiring was not broad-based. Goods producers, which are sensitive to interest rates, are pulling back, and job changers are commanding smaller pay gains. While we’re seeing early signs of Fed-driven demand destruction, it’s affecting only certain sectors of the labor market.”
BOTTOM LINE: This + jobs openings = no Fed pivot
