Market News

US private sector adds more jobs than expected in October - ADP

31/10/2018 11:29

(Sharecast News) - Private sector employment in the US rose more than expected in October, according to data released by the ADP on Wednesday. Employers added 227,000 jobs versus expectations for a smaller increase of 189,000.

Meanwhile, September's total was revised down to 218,000 from 230,000. Small businesses with fewer than 50 employees added 29,000 jobs, while medium businesses with between 50 and 499 employees created an extra 96,000 jobs.

Large companies with 500 or more employees recruited an extra 102,000 people. The goods-producing sector created 38,000 new jobs, while the services sector added 189,000 jobs, with the biggest contribution from trade/transportation/utilities. Mark Zandi, chief economist at Moody's Analytics, said: "The job market bounced back strongly last month despite being hit by back-to-back hurricanes.

Testimonial to the robust employment picture is the broad-based gains in jobs across industries.

The only blemish is the struggles small businesses are having filling open job positions." Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said: "Despite a significant shortage in skilled talent, the labour market continues to grow.

We saw significant gains across all industries with trade and leisure and hospitality leading the way.

We continue to see larger employers benefit in this environment as they are more apt to provide the competitive wages and strong benefits employees desire." Andrew Hunter, US economist at Capital Economics, said the rise in the ADP measure shows that labour market conditions remain "unusually strong".

He continues to expect the official non-farm payrolls figures due on Friday to show a solid 185,000 gain. "Admittedly, the recent hurricanes make the ADP report an even less reliable guide than usual to the official non-farm payrolls figures.

While the ADP survey counts anyone on the payroll as employed, the BLS measure only includes those who were paid during the survey period.

With Hurricane Florence hitting the Carolinas in mid-September, that appeared to explain why non-farm payrolls rose by a softer 134,000 last month, despite the ADP survey showing a much stronger 218,000 gain.

And although we would ordinarily have expected a bounce-back in non-farm payrolls growth in October, that will have been at least partly offset by the arrival of Hurricane Michael in the middle of the survey period. "The upshot is that, despite the stronger ADP reading in October, there is still an unusually high level of uncertainty around the official non-farm payrolls figures.

But Fed officials have already indicated that they will look through any temporary Hurricane distortions and, in any case, the wider evidence suggests that labour market conditions are still exceptionally strong."

Investors should be aware that past performance is not a reliable indicator of future results and that the price of shares and other investments, may fall as well as rise and the amount realised may be less than the original sum invested.


Walker Crips Group plc (Old Change House, 128 Queen Victoria Street, London EC4V 4BJ), registered in England, registered number 1432059, incorporates the following companies which are authorised and regulated by the Financial Conduct Authority: Walker Crips Investment Management Limited registered in England number 4774117 member of the London Stock Exchange, Walker Crips Wealth Management Limited registered in England number 3790291, Ebor Trustees Limited registered in England number 3514268, Barker Poland Asset Management LLP registered in England and Wales number OC341149.