October Employment Report Indicates Significant Increase in Jobs

October Employment Report: A Positive Surprise

As the elections are fast approaching, a negative employment print is the last thing anyone would expect. And true to form, the ADP Employment Report for October reveals an impressive increase in job numbers. The report indicates the creation of 233k jobs, which is more than double the expected 111k. The data for September was also revised to reflect a higher number.

Record-breaking Monthly Addition

The addition of 233k jobs is the highest monthly increase since July 2023, significantly exceeding expectations. Nela Richardson, Chief Economist at ADP, commented on the robust growth, saying, "Even amid hurricane recovery, job growth was strong in October. As we round out the year, hiring in the U.S. is proving to be robust and broadly resilient."

Year-over-Year Pay Gains

However, the report also shows a dip in year-over-year pay gains for those who retained their jobs, falling to 4.6 percent. This continues a two-year trend of slowing pay gains. For those who changed jobs, the pay gains also slowed, coming in at 6.2 percent.

ADP's Underestimation of BLS Data

It's important to note that ADP's estimates have been lower than the official BLS data for 12 of the past 14 months. This discrepancy raises questions about the accuracy of ADP's figures.

Implications for The Fed

This robust job growth may not be what The Fed's doves want to see. The question now is whether they will decide to cut under the current administration.

Bottom Line

The October Employment Report from ADP is a positive surprise, indicating a significant increase in jobs. This robust growth, especially in the face of hurricane recovery, is a testament to the resilience of the U.S. job market. However, the slowing pay gains for both job stayers and changers could be a cause for concern. What are your thoughts on this development? Do you think this robust job growth will influence The Fed's decisions? Share your thoughts and this article with your friends. Don't forget to sign up for the Daily Briefing, available every day at 6pm.