Survey finds October jobs gain
182,000 added,ADP reports; September’s count reduced
WASHINGTON — American businesses added a solid but unspectacular 182,000 jobs in October, according to a private survey.
In a report Wednesday, payroll processor ADP also revised September job creation down to 190,000 from an originally reported 200,000.
American consumers are spending at healthy levels, encouraged by increased job security, low energy prices and improved family finances. But manufacturers have been hurt by a strong dollar and economic weakness overseas. ADP reported that factories shed 2,000 jobs in October on top of a loss of 17,000 jobs in September.
“We suspect the strength of the dollar remains a constraint on factory payrolls, along with lower petroleum prices negatively impacting on oil drilling and related equipment,” Raymond Stone of Stone McCarthy Research wrote in a research report.
The government will issue its official jobs report for October on Friday. Economists forecast that report will show that employers added 180,000 private-sector and government jobs, and the unemployment rate stayed at 5.1 percent for the third straight month.
The ADP survey covers only private businesses and frequently diverges from the official figures.
Recently, the ADP figures have been rosier than the government’s.
Even the ADP’s lower, revised figure for new privatesector jobs in September — 190,000 — came in well above the Labor Department’s 118,000. And ADP’s number on business hiring in August — 182,000 — was higher than
the government’s 100,000.
“American companies are continuing to hire at a pretty healthy rate,” said Sal Guatieri, a senior economist in Toronto at BMO Capital Markets, who projected a 180,000 gain. “It’s reflecting strong growth in the U.S. economy. Strong job growth will reinforce a healthy trend in consumer spending.”
A second economic report released Wednesday said services firms expanded in October at the second-fastest pace in a decade, allowing the U.S. economy to forge ahead even as factories remain bogged down by sluggish overseas demand.
The Institute for Supply Management’s nonmanufacturing index advanced to 59.1 from 56.9 the prior month, the Tempe, Ariz.-based group said Wednesday. A gauge above 50 denotes expansion, and the reading exceeded all estimates in a Bloomberg survey.
Firmer home sales, job gains, low inflation and cheap borrowing costs are driving business at service providers, a reassuring sign that the economy will withstand malaise in manufacturing. Such domestic demand, which encouraged steppedup service-related hiring last month, helps explain why the Federal Reserve may raise interest rates next month.
“Given that the consumer continues to do the heavy lifting
for the economy, that’s going to benefit services,” Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pa., said before the report. “The job market’s tightening, we’re starting to see some glimpses of an acceleration in wage growth, and all that bodes well for the nonmanufacturing part of the economy.”
The median forecast in a Bloomberg survey of 74 economists was 56.5, with estimates ranging from 54.5 to 58.1. The October figure also exceeded the measure’s average of 57.3 this year through September.
The Institute for Supply Management’s services survey covers an array of industries, from retailing to health care, that make up almost 90 percent of the economy. It also factors in agriculture and construction.
The latest sign of resilient consumer demand was a pickup in motor vehicle sales. More than an annualized 18.1 million autos were purchased in October after a similar result a month earlier, the strongest back-to-back performance since 2000, based on Ward’s Automotive Group data.
Sales are surging as job growth, available credit and low gas prices encourage shoppers to replace aging models, especially with sport utility vehicles.