US sees number of private sector jobs created at its lowest since April
ADP employment change, a measure of private sector employment, has missed expectations in October, with the private sector creating 130,000 jobs in the month – a sixth-month low. Analysts had expected a rise of 150,000. Last month's number was 145,000 (revised down from 166,000).
Small businesses created 37,000 jobs, whilst medium businesses (50-499 employees) added 13,000 payrolls. Large businesses created 81,000 jobs, according to the measure.
President of ADP, Carlos Rodriguez, commented that the October figure is well below the average of the last twelve months. Small business growth was down from the previous month, but payrolls among large enterprises showed an increase, he added.
ADP is usually a proxy for the Bureau of Labor Statistics' monthly official jobs report but, because of government shutdown, this won't be coming out until next week, meaning that ADP will carry more weight in the markets.
Paul Ashworth, chief US economist at Capital Economics, comments that the dip may well be blamed on government shutdown afterit forced some private sector employers to reduce their headcount.
But, he says, "we're not convinced that explains all of the drop-off, however, because most of those private lay-offs were presumably temporary. The ADP survey counts the number of workers on private payrolls, regardless of whether they were at work or actually paid. Looking at the breakdown, the weakness in net job creation was mainly in smaller firms, with bigger firms doing better. Government contractors, particularly defence contractors, tend to be larger firms."
