Government Shutdown Helps Weaken October Jobs Growth

Nonfarm private employment increased by a seasonally adjusted 130,000 jobs for October, according to ADP's National Employment Report (link opens in PDF), released today. 

Human capital management company ADP partners with Moody's Analytics to produce the monthly report, based on ADP payroll data representing 416,000 U.S. clients employing nearly 24 million workers in the U.S.

After increasing a revised 145,000 jobs for September (a steep drop from its unrevised 166,000 increase), analysts had expected October's numbers to clock in at an adjusted 138,000. 

The shutdown, which began on Oct. 1, led some private contractors that do business with the government to temporarily lay off workers. It also may have prompted some companies to hold off on adding new workers. The ADP survey covers only private businesses and did not reflect government furloughs caused by the shutdown.

ADP Change in Nonfarm Payrolls Chart

ADP Change in Nonfarm Payrolls data by YCharts.

Small businesses (1-49 workers) added on a sizable 37,000 jobs, while medium (50-499) companies contributed 13,000. Large (500+) corporations, however, took the cake with 81,000 new jobs added for October. 

The services sector bumped up its employment numbers by 107,000, while goods-producing companies increased a much smaller 24,000. Manufacturing managed just 5,000 new jobs. 

This month's report puts job growth well below the average of the last year and, according to Moody's Analytics Chief Economist Mark Zandi, the government is to blame:

The government shutdown and debt limit brinksmanship hurt the already softening job market in October. Average monthly growth has fallen below 150,000. Any further weakening would signal rising unemployment. The weaker job growth is evident across most industries and company sizes.

link-- Material from The Associated Press was used in this report.


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