Private employment growth remained strong in October followed by gains in wages, particularly in the hospital-oriented industry, according to a brief report from payroll processing firm ADP.
Companies managed to add 239,000 workers for the month, topping the Dow Jones estimate of 195,000 and better than the downwardly revised 192,000 in September. Wages/salaries rose 7.7% on an annual basis, down 0.1 percentage points from the previous month.
Job growth was reported to be particularly strong in the leisure and hospitality sector, which added 210,000 positions while wage growth rose 11.2%. The industry, which includes hotels, restaurants, bars and related businesses, is seen as a driving force as it is the industry most affected by Covid-19.
Employment growth in service-related industries added 247,000 jobs, while the goods-producing sector lost 8,000 jobs, largely due to the loss of 20,000 manufacturing positions. Trade, transport and utilities increased by 84,000.
According to ADP's chief economist, Nela Richardson, "this is a very strong number. Producers of goods, sensitive to interest rates, pull back, and job-changers get smaller wage gains. While we are seeing early signs of a fall in demand driven by the Fed, it is only affecting certain sectors of the labor market.”
The Federal Reserve has raised interest rates in an effort to cool inflation that is nearing its highest level in more than 40 years. One major goal is the historically tight labor market, where job openings outnumber available workers by a nearly 2-to-1 margin.
The ADP report comes two days before the NFP data is released. The NFP reading is expected to show a growth of 205,000, from the 263,000 recorded in September.
