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U.S. companies added fewer jobs in October than forecast, a private report showed, indicating the absence of additional fiscal stimulus is prompting some firms to adjust payrolls as the pandemic continues to wear on the recovery.
Businesses’ payrolls increased by 365,000 last month after a revised 753,000 rise in September, according to ADP Research Institute data released Nov. 4. The October gain was weaker than all but one estimate in a Bloomberg survey of economists and was less than the median projection for a 643,000 gain.
The slower pace of hiring illustrates a long road to recovery for the labor market as the coronavirus continues to reduce revenue at service providers including the travel, hotel and restaurant industries.
“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,” Andrew Hunter, senior U.S. economist at Capital Economics, said in a note.
The data precedes the government’s monthly jobs report Nov. 6, which is forecast to show private payrolls increased by about 700,000 after an 877,000 gain in September. At the same time, public sector employment is likely to decline due to the unwind in federal government hiring as the 2020 Census concludes, according to a note by Bloomberg economists.
The ADP report showed service-provider employment increased 348,000 in October, reflecting slowdowns in hiring within trade and transportation, business services and health care. Payrolls at goods producers rose just 17,000 last month, the smallest gain in three months, due to less hiring in manufacturing and construction.
Medium-size businesses led the October rise with a 135,000 increase in payrolls. Large businesses hired 116,000 while small companies added 114,000 workers.
ADP’s payroll data represent firms employing nearly 26 million workers in the U.S.
With assistance from Chris Middleton.
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