An worker prepares a hot dog at a Portillo’s restaurant in Chicago, Illinois, on Tuesday, Sept. 27, 2022.
Christopher Dilts | Bloomberg | Getty Images
Private payroll growth held strong on October while employee pay rose as well, particularly within the leisure and hospitality industry, in line with a report Wednesday from payroll processing firm ADP.
Corporations added 239,000 positions for the month, ahead of the Dow Jones estimate of 195,000 and higher than the downwardly revised 192,000 in September. Wages increased 7.7% on an annual basis, down 0.1 percentage point from the previous month.
Job gains were especially strong within the pivotal leisure and hospitality sector, which added 210,000 positions while wage growth accelerated 11.2%. The industry, which incorporates hotel, restaurant, bars and related businesses, is seen as a bellwether because it took the toughest Covid and continues to be below pre-pandemic levels.
All of the job growth got here from services-related industries, which added 247,000 jobs, while goods-producing sectors lost 8,000 jobs, due largely to a lack of 20,000 manufacturing positions. Trade, transportation and utilities rose by 84,000.
“It is a really strong number given the maturity of the economic recovery however the hiring was not broad-based,” ADP chief economist Nela Richardson said. “Goods producers, that are sensitive to rates of interest, are pulling back, and job changers are commanding smaller pay gains. While we’re seeing early signs of Fed-driven demand destruction, it’s affecting only certain sectors of the labor market.”
The Federal Reserve has been raising rates of interest in an effort to chill inflation running near its highest level in greater than 40 years. One primary aim is the historically tight labor market, where job openings outnumber available staff by an almost 2-to-1 margin.
While the headline ADP number was strong, the main points looked weaker.
Together with the decline in construction jobs, information (-17,000), skilled and business services (-14,000) and financial activities (-10,000) also showed losses.
By business size, firms with between 50 and 249 employees had virtually all of the gains, adding 241,000.
The ADP report comes two days before the more closely watched nonfarm payrolls count from the Bureau of Labor Statistics. That report is anticipated to point out growth of 205,000, from September’s 263,000.
