American businesses added more jobs than economists expected for the second consecutive month, with hiring gains in transportation, health care and construction offsetting continued losses in professional services and other industries.
By yourNEWS Media Newsroom
WASHINGTON — U.S. private-sector employers added 86,000 jobs in October, exceeding economists’ expectations and matching September’s revised increase, according to a report released Wednesday, Nov. 4, by payroll processing company ADP.
The ADP National Employment Report, produced in collaboration with the Stanford Digital Economy Lab, showed continued employment growth across businesses of all sizes despite uneven hiring conditions in several industries.
October’s increase exceeded the 69,000 jobs forecast by economists surveyed by Reuters, according to the news agency’s analysis. ADP also revised September’s employment gain downward from 90,000 to 86,000, indicating that the pace of private-sector hiring remained unchanged between the two months.
The report found that service-providing industries accounted for 82,000 of October’s new jobs, while goods-producing businesses added 4,000 positions.
Trade, transportation and utilities led employment growth, adding 39,000 jobs. Education and health services followed with 28,000 positions, while leisure and hospitality businesses added 19,000. Financial activities contributed another 15,000 jobs, and other services gained 10,000.
Construction employment increased by 13,000 positions, helping offset losses elsewhere in goods-producing industries.
Professional and business services experienced the largest decline, shedding 27,000 jobs and extending the sector’s employment losses to a third consecutive month. Natural resources and mining lost 8,000 positions, while information services declined by 2,000 and manufacturing employment fell by 1,000.
The mixed results indicated that employers continued expanding payrolls in industries tied to transportation, consumer services and health care while hiring remained weaker in some professional and industrial sectors.
ADP Chief Economist Nela Richardson said the report showed businesses continued recruiting workers and that employees changing jobs were benefiting from stronger earnings growth.
“Employers of all sizes were hiring last month, and our data suggests that job-changers were lured by a combination of bonuses, overtime, and more hours in addition to higher base pay,” Richardson said. “Taken together, earnings growth for these workers hit its fastest pace since March 2024.”
The report also found that employment gains were distributed across small, medium-sized and large businesses.
Companies with fewer than 50 employees added 28,000 jobs, including 21,000 at establishments employing fewer than 20 workers. Medium-sized businesses with 50 to 499 employees added 33,000 positions, while large companies employing at least 500 workers increased payrolls by 24,000.
Geographically, the South recorded the strongest employment growth, adding 47,000 jobs. The West followed with 28,000, while the Midwest gained 9,000 and the Northeast added 3,000.
Within the South, the West South Central region accounted for 35,000 new positions, while the South Atlantic region added 15,000. Employment in the East South Central region declined by 3,000.
The Pacific region contributed 27,000 jobs to the West’s overall increase, while Mountain states added 1,000 positions.
Alongside employment growth, ADP reported that private-sector base pay increased 3.2% over the previous 12 months, while gross earnings, including additional compensation, rose 4.7%.
Workers who remained with their existing employers experienced median base-pay growth of 3%, compared with 4.8% for employees who changed jobs.
The difference was more pronounced when bonuses, overtime and other compensation were included. Gross pay increased 7.6% for job-changers, compared with 4.4% for workers who stayed in their positions.
According to ADP’s published employment and compensation figures, construction recorded annual base-pay growth of 4%, while manufacturing wages increased 3.5%. Trade, transportation and utilities workers experienced 3.4% growth, and employees in financial activities and natural resources saw increases of 3.5% and 3.3%, respectively.
The report comes as economists assess the strength of the American labor market amid persistent inflation concerns, elevated household expenses and uncertainty surrounding economic growth.
Although October’s private-sector employment increase exceeded expectations, the concentration of job creation in service industries and continued professional-services layoffs suggested that hiring conditions remained uneven.
According to MarketWatch’s assessment, private employment has generally expanded at a slower pace than historical averages, with businesses maintaining relatively low layoff rates while remaining cautious about adding workers.
The ADP figures also provide an early indication of labor market conditions ahead of the federal government’s October employment report, scheduled for release Friday, Nov. 6.
Economists surveyed by Reuters expect the Bureau of Labor Statistics to report an increase of approximately 65,000 total nonfarm jobs in October, following a gain of 29,000 in September. The unemployment rate is projected to remain at 4.2%.
The government report covers both public- and private-sector employment and relies on different data collection methods than ADP. Consequently, the two reports can produce substantially different monthly employment estimates.
ADP’s figures are based on anonymized weekly payroll records covering more than 26 million private-sector employees nationwide. Its separate compensation analysis uses more than 14.7 million year-over-year pay observations to measure changes in earnings.
The October results indicate that private businesses continued adding employees at a moderate pace, with employment growth exceeding forecasts and wage increases remaining steady despite weakness in several industries.
ADP’s next employment report, covering November, is scheduled for release Dec. 2.
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