Although less than anticipated, the October number represented a recovery from the September reading.
Payroll company ADP reported on Wednesday that private companies gained 113,000 jobs in October, with the education and health care industries leading the increase.
Although it was less than expected—a gain of 150,000 jobs—it was nevertheless an improvement over September, when unexpectedly few jobs—just 89,000—were created.
According to ADP Chief Economist Nela Richardson, “no single industry dominated hiring this month, and big post-pandemic pay increases seem to be behind us.” Overall, October’s data presents a complete picture of the jobs market. Furthermore, despite the slowdown in the labor sector, solid consumer spending is still supported.
96,000 new jobs were created by businesses with 50 to 249 people, making mid-sized corporations the primary employers.
The trade and transportation industry performed well, adding 35,000 jobs, in addition to the health care and education sectors.
The annual rate of wage growth was 5.7%, which was lower than the 5.9% recorded in September and the lowest since late 2021.
The focus on employment data for the week begins with the ADP report. The Labor Department releases its estimate of job openings for the end of September on Wednesday as well. Analysts predict 9.3 million positions will be available, a slight decrease from the 9.6 million in August. The October monthly jobs data will be released on Friday. A 190,000 increase is anticipated, as opposed to the unexpected 336,000 produced in September.
A positive development in the job market has been the deceleration of wage increases. The government announced on Tuesday that third-quarter employment costs increased by 1.1%. Though still on the decline, that was better than expected.
The 1.1% increase in the Employment Cost Index for the third quarter, according to Wells Fargo economists, “was a touch stronger than expected but showed labor cost pressures continue to slowly ease on trend.” “Labor cost growth is still too high to be consistent with the Fed’s 2% inflation target, with the ECI still running above 4%. But we still anticipate that the growth in compensation expenses will slow down going forward, with the recent deceleration serving as a buffer against further rate hikes by the Fed.
According to Rucha Vankudre, senior economist at the online employment and data analytics firm Lightcast, firms are increasingly placing a higher priority on retaining current employees than on hiring new ones.
“At this moment, retention is more of a battleground than hiring. Employers must presume that workers have alternatives, according to Vankudre. Hence, demonstrating that your company is a desirable place to work both now and in the future is a necessary component of being competitive.
The Federal Reserve is scheduled to make its most recent interest rate announcement this Wednesday afternoon. Most analysts anticipate that the central bank will maintain current rates following a pause in rate hikes in September.
