ADP Report: Private Employers Added 147,000 Workers In October

Nov 2, 2016

ADP said private employers added 147,000 new workers to the payrolls last month, the smallest private sector jobs increase reported by the payroll processing and HR services company since April.

Economists were expecting the ADP National Employment Report would show an increase in the range of 165,000 to about 170,000. However, ADP, and its reporting partner Moody’s Analytics, revised up the report for September, raising the initial 154,000 new job count to a year’s high of 202,000.

Friday, the Labor Department is due to release the government’s more comprehensive employment report for October. Economists expect it will show a combined private and government growth of about 175,000 new jobs.

There is some thought among analysts that the government could show a much higher increase. More employers have begun to hire seasonal help in October out of concern that could fall short if they waited. Outplacement firm Challenger, Gray & Christmas forecasts retailers will add 700,000 seasonal workers to their payrolls for the holidays. While that’s a bit smaller than in the past two years, the firm says other sectors, especially in warehousing and transportation, are adding more seasonal workers.

However, hiring overall this year has been lower than in 2015. Through the first nine months of the year, job growth has averaged 178,000. Last year, the average for the same period was 211,000.

Mark Zandi, chief economist of Moody’s Analytics, said, “Job growth remains strong although the pace of growth appears to be slowing. Behind the slowdown is businesses’ difficulty filling open positions. However, there is some weakness in construction, education and mining.”

The ADP report showed each of those sectors lost jobs in September: construction was off 15,000, education was off 12,000, and mining was down 2,000.

The biggest gainers were:

  • Professional/business services +69,000, a sector that includes staffing (temp) agency hires
  • Leisure/hospitality +38,000
  • Health care/social assistance +34,000.

The largest businesses lead the hiring, with companies of more than 1,000 employees adding 63,000 new jobs during October. Small businesses, which have accounted for the largest share of new jobs for the last few years, added 34,000. Mid-sized businesses — 50-499 workers — created 48,000 jobs.

“Job growth appears to be shifting from small to large companies due to the lessening impact the global economic environment had on large companies earlier in the year,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute. “This is also true because large companies often have the resources to attract workers with better pay and benefit packages.”

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