Skilled Worker Shortage
A close-up of a welder in Los Angeles. David McNew, Getty Images

ADP: US Companies Add Most Workers in 7 Months

Factories added 22,000 workers in October, with goods-producing industries adding 85,000 total.

Companies added more workers to U.S. payrolls in October than forecast, indicating hiring snapped back after hurricanes Harvey and Irma, according to data released Wednesday from the ADP Research Institute in Roseland, New Jersey.

Private payrolls rose by 235,000, well above the estimate of 200,000, the biggest gain since March, after a revised gain of 110,000 in September. Payrolls in goods-producing industries, which include builders and manufacturers, rose 85,000, and service providers added 150,000 to payrolls. Construction employment jumped by 62,000, the most since February 2006. Payrolls at business services providers added 109,000, the highest in records to 2002.

Key Takeaways

The report indicates resilience in the labor market and is consistent with other data that show the economy is recovering from the tropical storms. Employment is expanding as businesses remain optimistic about the outlook, at the same time employers face the challenge of finding skilled workers as the job market is tightening. The ADP results are also a sign that on Friday the government will report a rebound in private payrolls for October.

The surge in construction employment probably shows greater demand for labor to rebuild homes and businesses in the hurricane-stricken areas of Texas and Florida.

Economists’ Views

“Looking through the hurricane-created volatility, job growth is robust,” Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said in a statement. Moody’s produces the figures with ADP.

“The job market remains healthy and hiring bounced back with one of the best performances we’ve seen all year,” Ahu Yildirmaz, co-head of the ADP Research Institute, said in the statement. “We saw significant growth in professional services, especially in the higher paid professional technical jobs. Additionally, small businesses rebounded well from the impact of Hurricanes Harvey and Irma, posting very strong gains."

Other Details

Factories added 22,000 workers. … Education and health services took on 39,000 workers, while the leisure and hospitality industry added 45,000. … Companies employing 500 or more workers increased staffing by 90,000 jobs; payrolls rose by 66,000 at medium-sized businesses, or those with 50 to 499 employees; and small companies’ payrolls rose by 79,000.

By Shobhana Chandra

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