Payroll growth at private companies in October was higher than forecasted, signaling a potentially healthier-than-expected labor market.
According to ADP, companies added 42,000 jobs for the month, nearly twice the 22,000 consensus estimate from Dow Jones. This also contrasts with the 29,000 job losses recorded the month prior.
Trade, transportation, and utilities saw 47,000 new positions added, while education and health services grew by 26,000, and financial activities added 11,000.
At the same time, information services recorded a decline of 17,000 positions. Business services jobs also declined, losing 15,000, as did services (-13,000) and manufacturing (-3,000).
Notably, companies employing at least 250 workers added 76,000 jobs, helping offset the 34,000 positions lost in smaller businesses.
“While big companies make headlines, small companies drive hiring,” ADP’s chief economist, Nela Richardson, said on CNBC. “So to see that weakness at the small company level is still a concern, and I think that’s one of the reasons why the recovery has been so tepid.”
Year-over-year pay for those staying in their current positions increased by 4.5% during the period, the same rise observed in September. Job switchers earned a 6.7% salary increase, a slight increase from the previous month.
“Private employers added jobs in October for the first time since July, but hiring was modest relative to what we reported earlier this year,” Richardson said. “Meanwhile, pay growth has been largely flat for more than a year, indicating that shifts in supply and demand are balanced.”
The Federal Reserve recently cut interest rates by another quarter-point, driven in part by concerns of a softening labor market, as recently reported in The Dallas Express.
However, Fed officials, such as Governor Stephen Miran, have been warning that the central bank has not cut aggressively enough to help support the economy, a position he shares with President Trump.
Despite the better-than-expected payroll bump, data from Challenger, Gray & Christmas Inc. show that U.S. companies announced the most job cuts for any October in more than two decades. According to the consulting firm, companies announced 153,074 job cuts last month, nearly three times the number seen in October 2024.