Private employers hired at a slower-than-expected pace in October, indicating the labor market's recovery from the coronavirus crisis is cooling, according to the ADP National Employment Report released Wednesday.
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The report showed that companies created 365,000 new jobs last month, sharply missing the 650,000-job increase that economists surveyed by Refinitiv had expected.
“The labor market continues to add jobs, yet at a slower pace,” Ahu Yildirmaz, vice president and cohead of the ADP Research Institute, said in a statement. “Although the pace is slower, we’ve seen employment gains across all industries and sizes.”
September hiring was spread across most industries, with the biggest gains taking place in leisure and hospitality, one of the hardest-hit sectors by the pandemic. The sector added 125,000 jobs. Education and health services added 79,000 jobs, while professional and business services added 60,000. Trade, transportation and utilities saw an increase of 53,000.
Medium businesses led industries by size with the addition of 135,000 jobs last month at firms that employ between 50 and 499 workers. Large businesses added 116,000 jobs, and small businesses added 114,000 employees.
While the data is typically a good indicator of what to expect in the more closely watched jobs report from the Labor Department, the ADP figure has regularly missed the government's count since the pandemic began in mid-March. (In June, for instance, ADP initially said private employers added 2.37 million jobs -- well below the 4.8 million reported by the U.S. government. It also said the economy lost 2.7 million jobs in May, while the Labor Department reported a gain of 2.5 million).
The Labor Department's jobs report is predicted to show the U.S. economy added 600,000 jobs last month, down slightly from September's gain of 661,000. Analysts anticipate unemployment will edge lower to 7.6% from 7.9%.