ADP Private Payrolls Rose by 239,000 in October, Defying Slowdown Forecasts
2022.11.02 08:53
© Reuters
By Geoffrey Smith
Investing.com — The U.S. private sector picked up the pace of hiring again in October, defying expectations of a slowdown and potentially crimping the Federal Reserve’s ability to ease up on the pace of its interest rate hikes.
Payrolls processor ADP said had risen by 239,000 through the middle of the month, from 192,000 a month earlier. September’s figure was revised down from an originally reported 208,000. Analysts had expected a figure of around 195,000.
“This is a really strong number given the maturity of the economic recovery, but the hiring was not broad-based,” ADP’s chief economist Nela Richardson said in a statement. “Goods producers, which are sensitive to interest rates, are pulling back, and job changers are commanding smaller pay gains.”
Almost all of the gains in employment were down to the leisure and hospitality sector, which continues to extend its recovery from the pandemic. It added 210,000 jobs during the month. By contrast, construction employment was almost unchanged and manufacturing payrolls shrank by 20,000.
As with the Labor Department’s survey for September, which was released on Tuesday, the numbers appear to suggest that the labor market is still – at least in certain sectors – red hot, despite the Fed’s attempts to cool demand by raising interest rates sharply this year.
The 239,000 job gain is also bigger than the 200,000 consensus forecast for nonfarm payrolls in the government’s labor market report, which is due on Friday.
The is expected to announce another 75 basis point increase in the target range for Fed Funds later Wednesday, taking its upper limit to 4.0%.
“While we’re seeing early signs of Fed-driven demand destruction, it’s affecting only certain sectors of the labor market,” Richardson said.