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US October private employment rises 365,000, below expectations

·2-min read
US private employers added fewer jobs than expected in October
US private employers added fewer jobs than expected in October

Private employers added 365,000 jobs in the United States in October, a survey said Wednesday, a significant undershoot in hiring as the economy recovers from the coronavirus downturn amid the uncertain presidential election.

Forecasters had expected almost twice that number of new jobs in October, and the report from payroll services firm ADP is a potentially ominous sign ahead of Friday's data from the Labor Department that will update the national unemployment rate for the month.

The seasonally adjusted data comes as the results of Tuesday's election in which President Donald Trump vies for a second term against challenger Joe Biden remain undetermined.

Among the issues on voters' minds was the state of the world's largest economy, which expanded under Trump and reached record-low unemployment only to swiftly be undone by Covid-19's arrival, which prompted business shutdowns starting in March.

ADP has reported private hiring recovering since May, though the October report was its slowest rate of growth since the jobs clawback began.

"Another moderation in payrolls in October would be further evidence of the slowing trend that has emerged in recent months," Rubeela Farooqi of High Frequency Economics said.

Worsening matters is a resurgence of Covid-19 infections nationwide, which could hamper businesses' tentative steps to return to normalcy.

Lawmakers have also been unable to agree on a new economic stimulus package in response to the pandemic.

"A full recovery of jobs -- especially in the service sector -- will be a prolonged process, one that will be primarily dictated by the health crisis," Farooqi said.

The vast majority of new positions added were in the service sector, with goods producers making up the balance of 17,000, the data said.

Leisure and hospitality, which saw mass layoffs as the business shutdowns began, made up the bulk of the gains with 125,000 positions, while education and health added 79,000 jobs, the second-largest number.

Hiring was spread almost evenly across companies of different sizes, the data said, with small and large businesses adding about the same number of jobs and midsized firms adding slightly more.

The Friday Labor Department report will include the number of jobs added by both the government and private sector in October as well as the unemployment rate for the month, which is expected to decrease slightly from the 7.9 percent recorded in September.

cs/mjs