ADP Employment Measure Improves in October; Earnings Remain Strong

Nonfarm private sector payrolls increased 239,000 (3.4% y/y) during October after rising 192,000 in September, revised from 208,000. The August gain was revised to 132,000 from 185,000. Average growth of 188,000 during the last three months was the weakest since March 2021, down from a high of 529,000 in September of last year. The Action Economics Forecast Survey expected a 193,000 October rise.

Median annual pay is reported monthly with breakdowns by worker type, gender, age, industry and firm size. The annual rate of increase in pay for "job stayers" was a steady 7.7% y/y during October. That remained up from 1.6% in March of last year. By gender, female median pay rose 8.0% y/y compared to 7.5% for men. Pay gains have been fastest in the 16-24-year old age group (15.2% y/y) followed by 11.0% in the 25-34 bracket. Earnings in the 35-54 age group rose 7.5% y/y and 5.1% in the 55-85 age bracket. All of these increases are very much strengthened from early last year.

Small businesses (1-49 employees) added 25,000 jobs (1.8% y/y) following a 32,000 September increase. The 27,000-average gain during the last three months compared to 151,000 as of January. Employment at firms with 50-499 employees rose 218,000 (4.3% y/y) after a 102,000 September gain. Averaging 124,000 over the last three months, growth was down from 273,000 as of May. Employment at large firms (500+ employees) eased 4,000 (+7.7% y/y) last month after a 58,000 September rise. Three-month growth of 36,000 compares to 107,000 as of April.

By industry group, goods-producing employment declined 8,000 (+2.7% y/y) after an upwardly revised 34,000 September rise. Factory sector jobs declined 20,000 (+1.3% y/y) after falling 22,000 in September while construction employment edged 1,000 higher (3.7% y/y) following a 13,000 decline.

Service-producing jobs rose 247,000 last month following a downwardly-revised 158,000 September increase. Annual growth of 3.6% compares to a 4.9% high as of April. Leisure & hospitality employment increased 210,000 (9.3% y/y) after declining in two of the prior three months. Trade, transportation & utilities payrolls rose 84,000 (3.6% y/y) but professional & business services employment fell 14,000 (+3.3% y/y), off for the third straight month. Education & health care employment weakened 5,000 (+0.5% y/y), also down for the third straight month. Information sector jobs fell 17,000 (+3.5% y/y), off for the third straight month, while the number of financial activities jobs declined 10,000 (-0.8% y/y), down for the fourth straight month.

By Census region, employment in the West rose 229,000 (4.9% y/y), the best performance of the four major regions. The gain followed two consecutive increases of roughly 40,000. Jobs in the Northeast rose 50,000 in October (4.1% y/y) following a 247,000 gain in September. To the downside, employment in the Midwest declined 23,000 (1.7% y/y), off for the fourth consecutive month, while the number of jobs in the South weakened 17,000 (+3.2% y/y) following a 46,000 September decline.

The ADP National Employment Report and Pay Insights data can be found in Haver's USECON database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's AS1REPNA database.