Employment growth remained decent during October according to private payroll processor ADP. It claims that 230,000 positions were added last month and revised higher its take on September additions to 225,000. From what we can tell, more than half of the positions were added by medium-sized companies, or those employing between 50-499 workers. Such companies added 122,000 jobs in October, which compares to an average pace of 70,000 over the past 12-months. It is the largest addition within this category since June. For six-out-of-10 months, the ADP measure has run above a level of 200,000 jobs, which is consistent with the low level of weekly initial jobless claims over the summer. The service sector added around 181,000 positions while the goods producing sector added 48,000. The mix of job gains within the goods producing sector flip-flopped last month. Manufacturing positions increased by 15,000 and less than half the increase seen in September, while the number of construction positions rose by 28,000, which is more than two-times the September reading of 13,000. Overall, the report is strong enough to maintain the view that the labor market is recovering into the final quarter, and is likely to provide optimism among investors ahead of Friday's official government employment report. The Bloomberg consensus ahead of that reading is for a similar gain of 232,000 for the nonfarm payroll measure.
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Chart – Medium sized firms added significantly to payrolls in October
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