The U.S. private-sector added 42,000 jobs in October, according to new employment data from ADP, offering a tentative sign of stabilization in the labor market as the nation continues to operate without official federal statistics due to the government shutdown. The modest improvement marks a reversal from job losses recorded in August and September, but ADP analysts cautioned the gains remain narrowly concentrated and fragile.
Nela Richardson, ADP's chief economist, said the improvement should be interpreted carefully. "That recovery is tepid, and it is not broad-based," Richardson told reporters. While hiring resumed, she noted that underlying momentum has weakened compared to earlier this year.
Job gains were led by trade, transportation and utilities, which added 47,000 positions. Education and health services followed with 26,000 hires, while financial activities gained 11,000 jobs. In contrast, several sectors contracted. Information shed 17,000 positions, professional and business services lost 15,000 roles, and leisure and hospitality saw a decline of 6,000 jobs.
Richardson emphasized the importance of the downturn in consumer-facing fields. "The most concerning trend would be that drop in leisure and hospitality, because that points swiftly back to the consumer and how healthy and resilient the consumer will be," she said, noting seasonal pressure as the holiday season approaches.
The hiring picture also varied sharply by company size. All of October's net job growth came from firms with 250 or more employees, which added 76,000 jobs. Small businesses, by contrast, cut 34,000 positions. Richardson said the trend should not be overlooked. "While big companies make headlines, small companies drive hiring," she said on CNBC. "So to see that weakness at the small company level is still a concern."
Despite the slowdown in job creation, wages continued to rise. ADP reported that pay for job stayers increased 4.5% in October from a year earlier, while workers who switched jobs saw pay increase 6.7%.
The shutdown has elevated the importance of ADP's report, which normally precedes federal Bureau of Labor Statistics payroll data. The BLS has stopped producing employment figures during the shutdown, obscuring trends in national hiring and joblessness. Federal Reserve Chair Jerome Powell acknowledged the uncertainty last week, saying the lack of government reporting is "clouding" the central bank's assessment of economic conditions. "If you're driving in the fog, you slow down," Powell said. "I hope by the time of the December meeting, we're getting a better flow of data."
