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Private payrolls rose 42,000 in October, more than expected and countering labor market fears: ADP
11/5/2025, 1:45:54 PM
Economic Summary
- ADP reported private payroll gains of 42,000 in October (goods +9,000; services +33,000), beating expectations by roughly 20,000 and marking a turnaround from September’s loss; this suggests modest ongoing hiring but not a broad acceleration (ADP).
- Small firms (under 50 workers) lost about 10,000 jobs — the third consecutive monthly decline — which is notable because roughly three‑quarters of U.S. workers are employed by companies with fewer than 250 employees, so small‑business weakness can materially slow recovery.
- Sector divergence: trade, transportation, and utilities added about 47,000 jobs while leisure and hospitality fell ~6,000 and information declined ~17,000, underscoring a non‑broad based, K‑shaped recovery across industries.
- Wage growth held steady (around 4.5% for job stayers; ~6–7% for job changers), implying the labor market is neither loosening significantly nor tightening markedly—supporting the characterization of a 'muddled middle' for Fed policy decisions.
- Demographics and immigration trends (lower labor force growth, aging population) mean long‑run employment growth may be structurally lower, so smaller job gains could be sufficient to prevent a rising unemployment rate absent labor‑force expansion.
Bullish
- ADP private payrolls beat expectations with +42,000, a turnaround from the prior month.
- Large companies continue to add jobs, partially offsetting small‑business losses.
Bearish
- Small businesses losing workers (third consecutive month), signaling weakness at firms under 50 employees.
- Tepid, uneven recovery with weakness in professional services, information, and leisure/hospitality.
- Tariff uncertainty and demographic headwinds could further pressure hiring and small‑business activity.
- Wage growth unchanged, indicating neither clear slack nor tightening in the labor market.
Bullish tickers
ADP
ADP
Bullish
ADP payrolls beat expectations (+42,000) and reversed prior month losses, with large companies continuing to hire.
Bearish
Data show small‑business weakness and sector soft spots (small <50 lost 10k; information and leisure down), indicating a tepid, uneven recovery.
PAYCHECK
Bullish
CEO noted demand exists but labor supply constraints limit small‑business hiring in certain industries.
Bearish
Small businesses face hiring challenges and some are losing workers, per the CEO cited; uncertainty (tariffs, demographics) may pressure small firms.
People mentioned
Steve LeismanBeckyNeela RichardsonJohn Gibson