The monthly ADP report on private-sector job growth for October is a big miss, and not just from a standpoint of real economic development. The 130,000 jobs added is the worst in six months, and below the ADP average for the past twelve months. And in even more bad news ahead of November 8th’s Bureau of Labor Statistics report, ADP revised its September estimate downward, too:
Private sector employment increased by 130,000 jobs from September to October, according to the October ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis. September’s job gain was revised down from 166,000 to 145,000. …
“According to ADP National Employment Report findings, the U.S. private sector added a total
of 130,000 jobs during the month of October, well below the average of the last twelve months,” said Carlos Rodriguez, president and chief executive officer of ADP. “Small business growth was down from the previous month, while payrolls among large enterprises showed an
Want to guess what ADP and Moody’s blame for the decline?
Mark Zandi, chief economist of Moody’s Analytics, said, “The government shutdown and debt limit brinksmanship hurt the already softening job market in October. Average monthly growth has fallen below 150,000. Any further weakening would signal rising unemployment. The weaker job growth is evident across most industries and company sizes.”
Well, maybe. The shutdown certainly didn’t help, and it did have an impact — a temporary impact — on contractors doing business with the federal government. The shutdown doesn’t explain this trend, though:
This decline started months ago, and it’s not a decline from a starting point of strength, either. In the past 12 months, we’ve had only one month of even decently strong hiring, with another just barely over the 200K mark. This economy needs 150,000 jobs added every month just to keep pace with population growth. Five of the last twelve months didn’t even cross that treading-water threshold in a series that routinely overstates actual BLS job-growth numbers, and four of those misses are in the previous seven months.
Job growth faltered in October, with the private sector adding just 130,000 new positions, according to the latest report from ADP and Moody’s Analytics.
Economists expected ADP to show private business created 150,000 new jobs in October. The actual count represented a downward drift from September’s number, which was revised lower from 166,000 to 145,000.
Don’t expect the Fed to change course, either, based on this data.