The Albany Gazette - Job growth up in US private sector on services boost

Policymakers have been eyeing the pace of job growth as they work to rein in inflation by lifting interest rates to cool demand.

While the labor market has been resilient in the face of higher rates, economists expect officials to hold off a further hike at the end of a policy meeting Wednesday as they work to balance the inflation fight against tipping the economy into a downturn.

In October, the US private sector added 113,000 jobs, above the 100,000 figure expected by analysts, according to the latest ADP report.

This was also higher than the 89,000 figure in September.

"No single industry dominated hiring this month, and big post-pandemic pay increases seem to be behind us," said ADP chief economist Nela Richardson in a statement.

She added that although the job market has slowed, it is still "enough to support strong consumer spending."

The service sector accounted for most job creation last month with education and health services adding 45,000 jobs, while trade, transport and utilities added 35,000.

Meanwhile, wage growth slowed to a two-year low, said ADP.

Those who remained in their jobs reported a 5.7 percent pay increase from a year ago, while those who changed jobs saw their wages rise 8.4 percent.

"Overall, job growth remains positive," said Rubeela Farooqi, chief US economist at High Frequency Economics.

She added that the pace of job growth will likely slow as higher interest rates bite, weighing on demand and hiring moving forward.

Analysts have also cautioned that September ADP hiring data came in much lower than the official reading, noting that the figure may not be definitive.

(W.Williams--TAG)