Private Sector Job Growth Steady in October, Driven Primarily by Service Sector
- ADP reported a steady increase of 86,000 private sector jobs in October.
- Most job gains were in the service sector, particularly trade, education, and hospitality.
- Average pay increased by 3.2%, with job-changers seeing a notable rise of 4.8% annually.
Private sector job growth remained consistent in October, according to a report by ADP released on Wednesday. The payrolls processing firm recorded an addition of 86,000 jobs for the month, matching the revised figure for September and surpassing the Dow Jones estimate of 75,000.
The service sector was the primary driver of these employment gains. Notable contributions came from trade, transportation, and utilities, which created 39,000 new jobs. Education and health services added 28,000 positions, while the leisure and hospitality sector contributed 19,000 jobs. Additional gains were seen in financial activities (15,000), construction (13,000), and other services (10,000).
However, the overall growth was tempered by declines in specific sectors. Professional and business services reported a loss of 27,000 jobs, natural resources and mining saw a decrease of 8,000 jobs, and the information services sector experienced a reduction of 2,000 positions, influenced potentially by developments in artificial intelligence.
On the compensation front, salaries demonstrated upward momentum, especially among job-switchers, who experienced an annual pay increase of 4.8%. A report from the Bureau of Labor Statistics highlighted that the number of employees voluntarily leaving their jobs reached its highest level since March 2025, indicating positive labor market mobility.
A broader view of compensation revealed a 3.2% increase in base pay for workers overall, while gross pay rose by 4.7% annually. Workers who remained in their positions saw a pay increase of 3%.
Nela Richardson, ADP’s chief economist, commented, “Employers of all sizes were hiring last month, and our data suggests that job-changers were lured by a combination of bonuses, overtime, and more hours in addition to higher base pay. Taken together, earnings growth for these workers hit its fastest pace since March 2024.”
In terms of company size, businesses with 50 to 499 employees added 33,000 jobs, large firms added 24,000, and small businesses increased their workforce by 28,000.
This ADP report precedes the Bureau of Labor Statistics’ nonfarm payroll data, which is expected to be released on Friday. Economists surveyed by Dow Jones anticipate a gain of 59,000 jobs for October, following a modest growth of 29,000 in September.
News Courtesy of CNBC
