New Jobs Report Says More Hiring in October

Private sector hiring increased in October as the total unemployment claims, including first-time unemployment benefit claims, fell slightly again, market analysts said.

According to the payroll processor ADP, private employers added 158,000 non-farm jobs nationwide in the one-month period, including jobs in construction, transportation and utilities. Economists had forecast that the job surge would total 143,000.

The ADP report shows growth over September, which had a gain of 114,000 jobs. However, the report only covers jobs in the private sector and does not include government jobs. It does cover jobs in construction, finance, manufacturing, professional and business services, and transportation, trade and utilities.

Scrutinizing the Numbers

Even with the seemingly positive numbers, many market analysts are looking at ADP’s numbers with a critical eye.  In past months, ADP has been criticized for overstating job growth in 2012 and underestimating it in 2011. In October, the company announced it revised its methodology in its monthly job reports to be more aligned with the Bureau of Labor Statistics (BLS) final monthly update, which is expected to come out later this week.

The BLS information is more widely accepted as the clear indicator of job health and typically offers a bigger picture look at national employment, including both public and private sector jobs. With ADP’s fine-tuning, it’s unclear if the two reports will actually be more aligned.

With less than a week to go until the presidential election, and all outright campaigning at a standstill because of storm damage across the eastern seaboard, both the ADP and the BLS reports could be a tipping point for either candidate. They offer a tangible look at the health of the nation’s economy and job market.

Where New Jobs Formed

According to ADP, large businesses with 1,000 or more employees have seen the largest gains in job growth, adding 81,000 new jobs. Small businesses, those with 40 employees or fewer, have also seen a surge of 50,000 jobs. Medium-sized businesses, with 50 to 499 employees, saw a growth of 27,000 jobs.

“October’s job gains were in line with the average monthly gains of the past two years, with sturdy albeit less than stellar growth across most industries and company sizes,” economist Mark Zandi wrote in a statement.

The report also said that the biggest growth was in the professional/business service sector, with 35,000 jobs. Trade, transportation and utilities services saw 24,000 new jobs and construction had 23,000 new jobs. The financial sector gained 9,000 jobs. The only sector to see a loss was manufacturing, with a deficit of 8,000 jobs.

Today, the national unemployment rate still stands at 7.8 percent, the lowest in three years. Overall, about 363,000 people filed for first-time unemployment benefits during the week of October 27, 9,000 fewer than in the previous week.

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it seven years ago, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering college and professional sports, which are the fantasy worlds of finance. His work has been published by the Associated Press, New York Times, Washington Post, Chicago Tribune, Sports Illustrated and Sporting News, among others. His interest in sports has waned some, but his interest in never reaching for his wallet is as passionate as ever. Bill can be reached at bfay@debt.org.

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    Sources:

    1. Luhby, T. (2012, November 1). Private hiring jumps, unemployment claims fall. CNN Money. Retrieved from http://money.cnn.com/2012/11/01/news/economy/adp-jobs-initial-claims/index.html?iid=HP_LN
    2. Schneider, M. (2012, November 1). ADP National Employment Report: private sector employment increased by 158,000 jobs in October. ADP.
    3. Associated Press. (2012, November 1). ADP: U.S. businesses added 158,000 jobs in Oct. The Washington Times. Retrieved from http://www.washingtontimes.com/news/2012/nov/1/adp-us-businesses-added-158000-jobs-oct/