ADP

By Xavier Fontdegloria

Hiring in the U.S. private sector accelerated in October, in a sign the labor market remained resilient as high inflation and rising interest rates hit economic growth.

Employment in the nonfarm private sector increased by 239,000 in October from 192,000 in September, data from the ADP National Employment Report showed Wednesday. September's figure was downwardly revised from an initial estimate of a 208,000 payroll gain.

Economists polled by The Wall Street Journal expected an increase of 195,000.

"This is a really strong number given the maturity of the economic recovery but the hiring was not broad-based," said Nela Richardson, chief economist at ADP.

The ADP estimate is based on aggregated payroll data of more than 25 million U.S. workers and is independent from the Labor Department official data. The report's methodology has been upgraded and developed with the Stanford Digital Economy Lab. Before the change in methodology, the ADP series could diverge considerably from the Labor Department's data.

Medium-sized businesses led job creation in October, with 218,000 new jobs. Small businesses added 25,000 jobs, while large businesses shed 4,000 jobs, according to the report.

By sector, services providers created 247,000 jobs, with leisure and hospitality adding 210,000 payrolls as restaurants, retailers and the travel sector ramped up hiring in advance of the holidays.

However, goods producers lost on average 8,000 jobs, led by a 20,000 jobs in the manufacturing sector.

"Goods producers, which are sensitive to interest rates, are pulling back, and job changers are commanding smaller pay gains," Ms. Richardson said. "While we're seeing early signs of Fed-driven demand destruction, it's affecting only certain sectors of the labor market," she said.

Annual pay rose 7.7% in October, easing slightly from the 7.8% rise registered in September, the data showed. Pay data is based on the salaries of almost 10 million individual employees over a 12-month period.

The U.S. Labor Department is expected to release its October employment report on Friday. Economists polled by The Wall Street Journal expect nonfarm payrolls to increase by 205,000, and the unemployment is seen unchanged at 3.5%.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

(END) Dow Jones Newswires

November 02, 2022 08:47 ET (12:47 GMT)

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