Strong growth in US private payrolls in October -ADP

The ADP National Employment Report on Wednesday showed that private payrolls increased by 571,000 jobs last month. Data for September was revised to add 523,000 jobs instead of the 568,000 initially reported. Economists surveyed by Reuters estimated that private payrolls would increase by 400,000 jobs.

The ADP report is jointly developed with Moody’s Analytics and was published Friday ahead of the Labor Department’s more comprehensive, and closely watched employment report for October. But it has a disappointing record of predicting private payroll counts in the department’s Bureau of Labor Statistics (BLS) employment report due to methodological differences.

Economists expect hiring to pick up in October, although persistent labor shortages remain a challenge. There were 10.4 million job opportunities at the end of August.

Labor market indicators improved mostly in October as the heat wave of COVID-19 infections, driven by the delta version, eased significantly.

Initial claims for unemployment benefits have fallen below 300,000 for the first time since the coronavirus pandemic in the United States nearly 20 months ago.

The conference board’s labor market gap – derived from data on consumer perceptions of whether jobs are plentiful or hard to find – reached a 21-year high. The factory employability measure of the Institute for Supply Management also increased.

Private payrolls are expected to increase by 400,000 jobs in October, according to a poll of Reuters economists. Government recruitments are projected to increase by 50,000, increasing the total salary to 450,000 jobs.

The economy created 194,000 jobs in September, the lowest in nine months. The labor supply remained tight despite the end of federal government-funded unemployment benefits, which businesses and Republicans argued was a disincentive for the unemployed to seek work.