WASHINGTON (Reuters) -U.S. private payrolls rebounded sharply in October, but the turnaround likely does not suggest a material shift in the labor market because some industries such as professional business services shed jobs for a third straight month.
Private employment increased by 42,000 jobs last month after an upwardly revised decline of 29,000 in September, the ADP National Employment Report showed on Wednesday. Economists polled by Reuters had forecast private employment would rise by 28,000 jobs after a previously reported drop of 32,000 in September.
“Private employers added jobs for the first time since July, but hiring was modest relative to what we reported earlier this year,” said Nela Richardson, chief economist at ADP.
The narrow increase in private payrolls was led by the education and health care, trade, transportation and utilities sectors. For the third straight month, employers shed jobs in the professional business services, information as well as the leisure and hospitality industries.
The ADP report is jointly developed with the Stanford Digital Economy Lab. The monthly estimate has historically diverged from the government payrolls count produced by the Labor Department’s Bureau of Labor Statistics.
Even with the BLS’ closely watched employment report delayed again because of the longest government shutdown on record, economists continue to urge caution when interpreting the ADP report, noting differences in methodologies among other limitations.
“The ADP data is limited to the private-sector businesses that rely on ADP to manage their payrolls needs, making the ADP data less nationally representative,” said Matthew Martin, senior U.S. economist at Oxford Economics. “The ADP employment data should be viewed as a complement, not a replacement, for the BLS employment establishment survey.”
The shutdown, now in its second month, delayed the September employment report, which was due on October 3. While that report could still be released when the government reopens, doubts are growing that the BLS would be able to produce the full October report because of the suspension of data collection.
The October employment report was scheduled for release on Friday. The White House warned last month that October’s consumer inflation report might not be published for the first time ever because of the shutdown.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao)
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