Companies added workers in October, easing concern the job market is stagnating in the third year of the U.S. recovery, according to a private report based on payrolls.
The 110,000 increased followed a revised 116,000 gain the prior month, Roseland, New Jersey-based ADP Employer Services said today. The median forecast of economists surveyed by Bloomberg News called for a advance of 100,000.
A pickup in private hiring is needed to help reduce unemployment and boost consumer spending, which accounts for about 70 percent of the economy. Businesses added 125,000 jobs in October and the jobless rate was 9.1 percent for a fourth straight month, economists in a Bloomberg survey projected ahead of a Labor Department report Nov. 4.
“Hiring isn’t strong enough to decrease the unemployment rate,” Sean Incremona, a senior economist at 4Cast Inc. in New York, said before the report. “The labor market will stay under pressure.”
Projections in the Bloomberg survey ranged from 38,000 to 150,000.
Last month, ADP’s initial figures showed a 91,000 gain in company payrolls for September, while the Labor Department’s data showed an increase of 137,000 in private payrolls.
The ADP report showed a decrease of 4,000 workers in goods- producing industries, which include manufacturers and construction companies. Employment at factories dropped by 8,000 jobs.
Service providers added 114,000 workers.
Companies employing more than 499 workers cut 1,000 jobs. Medium-sized businesses, with 50 to 499 employees, took on 53,000 and small companies increased payrolls by 58,000, ADP said.
“The recent trend in private employment is probably below a pace consistent with a stable unemployment rate and reflects the sluggish of pace of GDP growth,” Joel Prakken, chairman of Macroeconomic Advisers LLC in St. Louis, which produces the data with ADP, said in a statement.
Another report today showed employers announced 13 percent more job cuts in October than in the same month last year, according to figures from Chicago-based Challenger, Gray & Christmas Inc. Job-cut announcements totaled 42,759 and were led by government agencies and financial companies.
Unemployment has been around 9 percent or higher for 30 months, posing a hurdle for Federal Reserve policy makers who will wrap up their two-day meeting later today. Fed Governor Daniel Tarullo is among policy makers who believe more steps by the central bank to revive growth and boost the labor market may be warranted.
“The pace of job growth in recent quarters has been barely enough to absorb the increase in the labor force and wholly insufficient to produce meaningful declines in unemployment,” Tarullo said in an Oct. 20 speech in New York.
The Labor Department’s report in two days may show overall payrolls rose by 95,000 in October, following a gain of 103,000, according to the Bloomberg survey.
Companies adding staff include FedEx Corp., operator of the world’s largest cargo airline, which said last month that it plans to hire 20,000 seasonal workers, 18 percent more than last year, to handle a surge in holiday deliveries.
Some businesses plan to cut employment. Thousand Oaks, California-based Amgen Inc., the world’s largest biotechnology company, is firing 380 employees in its research and development division and Alamo Group Inc. said it will eliminate 77 workers as it closes a plant in Sioux Falls, South Dakota.
The ADP report is based on data from about 337,000 businesses with more than 21 million workers on payrolls. Macroeconomic Advisers LLC in St. Louis produces the data with ADP.