ADP said 571k private sector jobs were added in October, well above the estimate of 400k and after a gain of 523k in September (revised down by 45k). The gain was dominated by large businesses, those defined as having more than 500 employees and in this case those with more than 1000, who added 342k of the jobs, 305k of which was with the 1000+ employee size.
The service sector hired a net 458k vs 431k last month with leisure/hospitality leading the way making up 185k of this vs 200k in the month before. Trade/transportation/utilities, where we know many are needed, added 78k, the most in 5 months. Healthcare/social assistance continued with its consistent hiring, by 47k in October vs 38k in September.
The goods side hired a net 113k with 53k coming from manufacturing and 54k from construction. That is the most since September 2020 with both categories also the most since then.
Bottom line, with more than 10mm job openings and the drop in both initial and continuing claims along with the daily labor shortage stories we keep hearing, we saw a nice job gain in October. After losing 19.5mm jobs last March and April, ADP said we’ve since added back 14.55mm. We know though that many people that make up the difference are not coming back, whether they’ve retired or there is some other reason so hoping for a pre Covid labor force repeat is completely unrealistic I believe. That said, we should continue to close the gap in the months and quarters ahead.
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.