A “Now Hiring” sign at a CVS pharmacy in San Francisco, California, US, on Tuesday, July 18, 2023. CVS Health Corp. is scheduled to release earnings figures on August 2.
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Private sector payroll growth increased modestly in October but missed expectations, in a potential sign that the employment picture could be darkening, ADP reported Wednesday.
The payrolls processing firm reported that companies added 113,000 workers for the month, higher than the unrevised 89,000 in September but below the Dow Jones consensus estimate of 130,000.
On wages, ADP said pay was up 5.7% from a year ago, the smallest annual gain since October 2021.
From a sector standpoint, education and health services led with 45,000 new jobs. Other notable gainers included trade, transportation and utilities (35,000), financial activities (21,000), and leisure and hospitality (17,000).
Almost all of the jobs came from services-providing industries, with goods producers contributing just 6,000 towards the total.
Firms employing between 50-499 workers contributed the most, with a gain of 78,000.
“No single industry dominated hiring this month, and big post-pandemic pay increases seem to be behind
us,” said ADP chief economist Nela Richardson. “In all, October’s numbers paint a well-rounded jobs picture. And while the labor market has slowed, it’s still enough to support strong consumer spending.”
The release comes two days ahead of the Labor Department’s official nonfarm payrolls report, which is expected to show an increase of 170,000 and includes government jobs, unlike ADP. The counts from ADP and the government can differ substantially, as they did in September when the Labor Department reported a gain of 336,000, more than three times the ADP estimate.
