US October ADP jobs growth hit 86K, ahead of 65K forecast

Data breakdown:

• The prior month came in at +90K.
• Construction added 13,000 positions, compared with 15,000 in the preceding month.
• Manufacturing shed 1,000 jobs, having added 17,000 the prior month.
• Natural resources and mining was down 8,000, versus -1,000 earlier.
• Financial activities picked up 15,000 jobs, turning around a 16,000 decline in the previous report.
• Professional and business services fell 27,000, after a decrease of 11,000.
• Education and health services rose 28,000, less than the 55,000 added prior.
• Leisure and hospitality gained 19,000, following a gain of 22,000.
• Wage growth for all workers was 4.7%, against 4.8% in the prior month.
• Workers who stayed in their positions saw 4.4% wage growth, unchanged from the previous report.
• Workers who changed jobs saw 7.6% wage growth, up from 7.3%.

In the report, ADP chief economist Nela Richardson said:

"Employers of all sizes were hiring last month, and our data suggests that job-changers were lured by a combination of bonuses, overtime, and more hours in addition to higher base pay. Taken together, earnings growth for these workers hit its fastest pace since March 2024."

The ADP National Employment Report, which estimates monthly US private-sector job growth, is produced by ADP Research with the Stanford Digital Economy Lab. Publication typically comes at 8:15 am ET on the Wednesday before the government's nonfarm payrolls report, offering markets an early and independent look at hiring.

The data behind it come from anonymized payroll records covering millions of workers at ADP client firms, placing the sample among the largest real-time employment datasets in the US. Because the measure includes private employers only, government jobs are excluded. The top-line number is the month-over-month change in private payrolls, broken out by industry, establishment size and region.

ADP changed its methodology in 2022 so the calculations draw more directly on its own payroll files rather than on an attempt to mirror the government's numbers. The release also carries pay insights, showing median annual wage growth separately for job stayers and job changers. The gap between the two rates serves as a gauge of labor-market tightness. ADP has also started producing weekly preliminary estimates, giving a more frequent read between monthly reports.

Even with a large sample, ADP's record at predicting nonfarm payrolls is mixed. The two figures use different methods and underlying data, so monthly results can differ sharply, with the gaps often reversing later. Large surprises can prompt trading moves, but many economists view the data as just one of several indicators rather than a reliable preview.

When the official employment data are delayed or cast into doubt, as can happen during government shutdowns, the ADP report gains importance because it may be among the few timely readings of the job market available.