Private wage growth in the United States came in much lower than expected in October, likely raising questions about the tight labor market.
According to the ADP National Employment Report published on Wednesday, Private wage growth increased by 113,000 jobs last month. Data for September was unchanged and showed the addition of 89,000 jobs as before. Reuters economists had forecast private payrolls to rise by 150,000 jobs.
The ADP report, co-developed by the Stanford Digital Economy Lab, was published ahead of the Labor Department's more comprehensive and observed Employment Report for October on Friday. The ADP report is not always a reliable indicator in trying to predict the number of private wages in the employment report.
Although the Federal Reserve has raised interest rates by 525 basis points since March 2022, the labor market remains strong. Based on a survey from the Conference Board on Tuesday, consumer views on the labor market were positive in October.
Based on a Reuters poll of economists, the Labor Department's Bureau of Labor Statistics is expected to report that private payrolls rose by 158,000 jobs in October after rising by 263,000 in September. The expected decline is likely to largely reflect a strike by the United Automobile Workers (UAW) union against Detroit's three major automakers, which is expected to hurt manufacturing wages.
The government reported last week that there were at least 30,000 UAW members on strike during the period surveyed by businesses for the October jobs report. A Reuters poll estimated that NFP data rose by 180,000 jobs in October, down from a strong 336,000 in September.
