Private sector employers in the US added more jobs than expected in October, this week’s marquee US macro release suggested.

The monthly ADP report’s standing in for the suspended BLS payrolls tally until such a time as Donald Trump and Congress decide to reopen the government.

Markets were already skeptical of the BLS numbers due to low response rates and Trump’s overt attempts to politicize the agency. The shutdown sows more distrust and investors will look askance at government data, including and especially the jobs report, once it resumes. (If it ever resumes.)

With that in mind, the ADP headline showed a 42,000 gain, meaningfully ahead of consensus and the first positive readout since July.

As the figure shows, October’s print was just high enough to keep the three-month average in positive territory. A consensus read would’ve seen it go negative for the first time since August of 2020.

ADP chief economist Nela Richardson described hiring as “modest” and pay growth as “largely flat.” “Shifts in supply and demand are balanced,” she went on.

By firm size, large companies accounted for all of October’s hiring and then some. Businesses with 500 or more employees added 74,000 jobs last month. Smaller businesses shed 32,000 positions. By sector, trade and transportation was the big gainer with 47,000 job additions followed by education and health which added 25,000 employees.

Pay gains were flat both for those who stayed in their current roles and for those who switched jobs at 4.5% and 6.7% YoY, respectively.

This release wasn’t strong enough to dispense with the notion that risks to the labor market are on the downside, but it was by no means weak enough to convert Fed hawks to doves for the purposes of the December FOMC meeting. This is a coy labor market.

The odds of another rate cut next month are better than even in my estimation (much better in the market’s eyes) but again, anyone who argued (or voted) against a cut in October is still skeptical after seeing this release.