US private sector adds fewer jobs than expected in October - ADP

Private sector employment in the US grew a lot less than expected in October amid a rise in coronavirus infections, according to the latest figures from the ADP.

Employment rose by 365,000 jobs from September to October, versus expectations of a 650,000 increase.

Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said: "The labour market continues to add jobs, yet at a slower pace. Although the pace is slower, we’ve seen employment gains across all industries and sizes."

Small business with fewer than 50 employees added 114,000 jobs, while medium-sized business with between 50 and 499 members of staff added 135,000. Large businesses with 500 employees or more created an extra 116,000 jobs.

The services sector added the most jobs, with the biggest contribution coming from leisure/hospitality.

Andrew Hunter, senior US economist at Capital Economics, said: "Although the markets remain firmly focused on the fallout from the elections, the 365,000 rise in the ADP measure of private employment in October indicates that the labour market recovery has continued to slow.

"That more muted increase, which follows a 753,000 rise in September, could be a sign that the latest wave of coronavirus infections is starting to weigh on the labour market recovery. But the details show that employment in leisure and hospitality actually saw a stronger increase last month, with the overall slowdown instead driven by trade, transport & utilities, health care and manufacturing.

“"iven the ADP’s poor recent record in tracking the BLS figures, we aren’t minded to change our forecast that the official non-farm payrolls figures (due on Friday) will show a 600,000 gain. Regardless, the big picture is that employment growth is continuing to slow and the new wave of virus cases is only likely to exacerbate that trend."