ADP private-sector employment report shows 114K gain in October

Since the next monthly employment report from the Department of Labor is due on Friday, it’s time for ADP to issue its analysis of private-sector employment for the month, too.  ADP predicted a 91,000 job gain in September and the actual figure from the private sector came in at 137,000, with 34,000 jobs lost in the public sector, although the government’s numbers included the return of 45,000 striking workers who never lost their jobs in the first place.  With that in mind, the ADP report looks rather wan … again:

Employment in the U.S. nonfarm private business sector increased by 110,000 from September to October on a seasonally adjusted basis, according to the latest ADP National Employment Report ® released today. The estimated advance in employment from August to September was revised up to 116,000 from the initially reported 91,000.

Today’s ADP National Employment Report suggests that the recent trend in private employment remains moderate, and probably is below a pace consistent with a stable unemployment rate.  This rate of moderate job creation reflects the sluggish pace of GDP growth exhibited earlier this year.

Manufacturing dropped by 8,000, leading an overall drop of 4,000 in the “goods-producing sector.”  Construction continued to fall.  Small businesses added 58,000 to the overall number, but that’s lower than September’s 64,000.  Large companies shed 1,000 jobs.

Reuters says that this is better than expected, but not by much:

U.S. private employers added more jobs than expected last month, while planned layoffs dropped sharply, underscoring the view the economy is on a path of slow growth.

The ADP National Employment Report showed on Wednesday the economy’s private sector added 110,000 jobs in October, topping economists’ expectations for a gain of 101,000 jobs. ADP also increased September’s job additions, to a gain of 116,000 from the previously reported 91,000.

And the expectations for Friday’s numbers is similarly muted:

The ADP figures come ahead of the government’s much more comprehensive labor market report on Friday, which includes both public and private sector employment.

That report is expected to show a rise in overall nonfarm payrolls of 95,000 last month, based on a Reuters poll of analysts, and a rise in private payrolls of 120,000. The unemployment rate is seen holding steady at 9.1 percent.

ADP is not a terribly correlative indicator, but it usually sets the ballpark environment for the official number two days later.  If the figure for September turns out to be 95K, that represents a backwards move in relation to population growth.  The economy has to add somewhere between 100K-125K jobs a month just to keep up with the number of working-age adults in the general population.  In order to start putting the currently unemployed back to work, we’d need job growth significantly and consistently above that level.  To make up for the six million or so still out of work that had been employed before Obama’s “recovery,” a job growth of 250K each month would take four years to make up that deficit — and we haven’t had that kind of consistent job growth at all.

Basically, this looks like an indicator of continued stagnation and malaise.  We’ll see on Friday how close ADP’s indicator got to reality.

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