Slowdown or shutdown? Whatever’s behind it, October’s private sector job growth was the smallest since April.
ADP and its partner Moody Analytics say only 130,000 jobs were created during the month. They also revised the initiate estimate of September’s new jobs to 145,000, a drop of 21,000.
Although the numbers are rarely in sync, today’s report doesn’t bode well for the official report from the U.S. Department of Labor. Delayed until Nov. 8 because of the government shutdown, that report is closely watched by economists and the Federal Reserve, which is using it as as indicator of the overall health of the U.S. economy.
20,000 jobs below expectations
Following today’s ADP National Employment Report, which came in about 20,000 jobs below expectations, economists now predict the Labor Department’s report will also show about 130,000 new jobs during the month of October.
Commenting on the report, Mark Zandi, chief economist with Moody’s, said, “The government shutdown and debt limit brinksmanship hurt the already softening job market in October. Average monthly growth has fallen below 150,000. Any further weakening would signal rising unemployment. The weaker job growth is evident across most industries and company sizes.”
Typically, small business — employers with fewer than 50 workers — has driven much of the job growth, often accounting for half, or nearly so, of the total new monthly jobs.
In October, ADP says it was large employers — those with more than 1000 workers — that did the heavy lifting, adding 79,000 new workers to the nation’s payrolls.
Small business added 37,000 new jobs, while employers with 50 to 500 workers accounted for 13,000 jobs. (Another 2,000 jobs came from employers with 500 to 999 workers.)
The service sector accounted for 107,000 of the jobs. The biggest gainer was the trade/transportation/utilities group which added 40,000. Financial activities group lost 5,000.