- Hiring held steady. Private companies added 86,000 jobs in October, the same as the downwardly revised September total and slightly ahead of the Dow Jones estimate of 75,000, ADP reported Wednesday, as the labor market showed fresh signs of stabilization.
- Services drove the gains. Trade, transportation and utilities led with 39,000 new jobs, education and health services added 28,000 and leisure and hospitality 19,000, with financial activities (15,000), construction (13,000) and other services (10,000) also growing. Professional and business services lost 27,000 jobs, natural resources and mining 8,000 and information services, a sector potentially affected by the AI buildout, 2,000.
- Job-changers are getting paid. Workers who switched jobs saw a 4.8% annual pay gain, while those staying put saw 3%. ADP chief economist Nela Richardson said earnings growth for job-changers “hit its fastest pace since March 2024,” as they were lured by bonuses, overtime and more hours in addition to higher base pay.
- Hiring was spread across company sizes. Firms with 50 to 499 workers added 33,000 jobs, small firms 28,000 and large businesses 24,000.
What Happened?
ADP’s October report showed private-sector job growth holding at 86,000, unchanged from September after revisions and above economists’ expectations. Gains came mainly in the service sector. Workers overall saw a 3.2% base pay gain, while gross pay rose 4.7% annually. A separate Bureau of Labor Statistics report on Tuesday showed the number of people quitting their jobs, a sign of labor market mobility, hit its highest level since March 2025.
Why It Matters?
A stable labor market with accelerating pay for job-changers keeps pressure on the Federal Reserve, which held off on additional rate hikes at its October meeting. Rising quits and stronger pay for switchers suggest workers still have bargaining power, which can feed into wage-driven inflation. Stronger labor data tend to put upward pressure on rates, while for stocks it reduces the risk of a sharp slowdown but lowers the odds of policy relief. The loss of information jobs is an early data point on AI’s effect on employment.
What’s Next?
The ADP report is a precursor to the BLS nonfarm payrolls report due Friday, where economists surveyed by Dow Jones expect a gain of 59,000 in October after September’s 29,000. A stronger-than-expected government figure, combined with rising wages, would strengthen the case for further Fed tightening. Investors will also watch whether job losses in professional services and information deepen.
