Is a hiring slowdown underway in the U.S.? Economists say no, but with ADP reporting a fourth consecutive month of sub-200k job growth. the question is one being asked with increasing frequency.
According to this morning’s ADP National Employment Report the economy added 182,000 new private sector jobs in October, slightly better than the 180,000 jobs forecast by economists. Yet the number was well below the 231,000 reported last year. The report also revised September’s initial 200,000 down to 190,000. Since the beginning of 2015, seven months have had job growth below 200,000, according to ADP. Only one month in all of 2014 was below 200k.
Job growth numbers from the U.S. government’s Bureau of Labor Statistics show a similar pattern. Through September, four months have had sub-200k growth. Last year only one month fell below 200,000.
Similarly, the American Staffing Association’s Staffing Index declined in October for the fifth consecutive month. For the month, the Index was 100.54, a decline of 4 percent over the same period last year. By the end of October, the Index improved to 101.7.
Economists are predicting that when the government releases its October employment report on Friday, it will show 182,000 new jobs were created. That will be a significant improvement over August and September, but well below the 221,000 new jobs in October 2014.
Economists, however, are confidant the economy is still strong.
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Quoted by Bloomberg Business, Sal Guatieri, a senior economist in Toronto at BMO Capital Markets, said, “American companies are continuing to hire at a pretty healthy rate … It’s reflecting strong growth in the U.S. economy. Strong job growth will reinforce a healthy trend in consumer spending.”
Mark Zandi, chief economist for Moody’s Analytics, which prepares the ADP report, expressed similar sentiments. The economy is creating close to 200,000 jobs per month. Job gains are broad based, with energy and manufacturing alone subtracting from the top line. Small businesses, in particular, are contributing to the labor market’s solid performance.”
According to ADP, employers with fewer than 50 workers added 90,000 new jobs in October. The largest employers — those with more than 500 workers — added 29,000. In September, large employers accounted for 101,000 new jobs, more than half the 190,000 private sector increase that month.
The service sector accounted for 158,000 new jobs; goods producers added 24,000. By industry, ADP reported:
- Construction 35,000
- Manufacturing -2,000
- Trade/transportation/utilities 35,000
- Financial activities 9,000
- Professional/business services 13,000