US economy adds 130,000 payrolls in October: ADP
Private sector US employers added 130,000 payrolls in October, the lowest since April, according to the ADP Institute. Job growth was well below the 12-month average, after the 16-day government shutdown slowed the pace of economic recovery.
Job creation was led by large enterprises, which were responsible for more than half of new payrolls. Job creation in the small business environment fell over the previous month, and was responsible for just 37,000 new jobs. The service economy was responsible for more than 82 percent of new hires. The trade, transportation and utilities industry added 40,000 jobs, while professional and business services added 20,000. Construction and manufacturing activities added a combined 19,000 workers, the report concluded. The biggest monthly decline came from financial activities, which shed 5,000 jobs.
The Labor Department will release official payroll figures at the end of next week. Since 2001 the monthly ADP figures have been remarkably consistent with the official payrolls report. According to official estimates, the US economy added an average of 143,000 jobs between July and September. After a downward revision of the September data, ADP’s monthly average for the same period was 152,000.
“The ADP data are pointing to some negative effects from the turmoil in Washington,” said Jim O’Sullivan of High Frequency Economics. O’Sullivan was of course referring to the partial government shutdown, which is projected to have cost the economy $24 billion. The impact of the government shutdown was felt in the public and private sectors. In addition to the furloughed government employees, private contractors doing business with government were forced to lay off workers and delay the hiring of new ones.
The cumulative impact of the budget impasse is yet to be seen. With consumer confidence at yearly lows and job growth waning, the US economy will face an uphill climb on its way to full recovery.
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