US private sector employers added 571,000 jobs in October, data out Wednesday showed.
The headline ADP print was considerably better than expected. Consensus was 400,000 (figure below).
The range of estimates, from three-dozen economists, was 300,000 to 730,000.
September’s headline figure was revised lower, as was August’s print.
The data came with the usual caveat. ADP hasn’t been a reliable predictor of NFP in the pandemic era, to put it politely. Nevertheless, upbeat assessments are welcome.
Gains were concentrated among large employers in October, when businesses boasting more than 500 employees added 342,000 jobs, more than double the combined total for small- and mid-sized businesses.
The services sector added 458,000 positions. At 185,000, leisure and hospitality hiring was a semblance of robust, but the pace is still well off the highs seen earlier this year (figure below).
Overall, ADP leisure and hospitality is still nowhere near pre-pandemic levels.
Notably, the monthly gain in goods-producing sectors was the largest since September of 2020 (figure below).
Construction, manufacturing and mining all added positions.
The accompanying commentary painted a rosy picture indeed.
“The labor market showed renewed momentum last month,” ADP chief economist Nela Richardson remarked. For his part, Mark Zandi said “the job market is revving back up as the Delta wave winds down.”
Ostensibly, the report bodes well for NFP on Friday. But, as BMO’s US rates team noted, echoing my assessment above, “as a precursor to Friday’s private-NFP print, ADP doesn’t have the most compelling track record.”
Zandi went on. “Job gains are accelerating across all industries, and especially among large companies,” he said, in a press release. “As long as the pandemic remains contained, more big job gains are likely in coming months.”
The question is: How much will employers have to pay?
