Companies expanded payrolls in October by the most in eight months, an indication the U.S. labor market was on the upswing at the start of the fourth quarter, according to a private report based on payrolls.
The 158,000 increase followed a revised 114,000 gain in September, data from the Roseland, New Jersey-based ADP Research Institute showed today. This is the first ADP report derived using a larger sample and new methodology.
Quicker job creation suggests confidence among businesses is holding up in the face of the so-called fiscal cliff, an onslaught of tax increases and spending cuts in place for next year should Congress fail to act. A Labor Department report tomorrow may show private payrolls increased by 124,000 in October while the unemployment rate rose to 7.9 percent, according to the median estimate in a Bloomberg survey.
“Businesses are adding consistently to their payrolls,” Mark Zandi, chief economist at Moody’s Analytics Inc., said in a statement accompanying the report, which he helped produce. “Businesses have turned more cautious in recent months, but that has yet to impact their hiring and firing decisions.”
Fewer Americans than forecast filed first-time claims for unemployment insurance last week, a Labor Department report showed today. Applications for jobless benefits fell 9,000 to 363,000 in the week ended Oct. 27, the fewest in three weeks.
Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey. Data for New Jersey and the District of Columbia were estimated because those offices were closed due to Hurricane Sandy, a spokesman said as the figures were released.
Stock-index futures were little changed after the figures. The contract on the Standard & Poor’s 500 Index expiring in December fell 0.1 percent to 1,406.8 at 8:40 a.m. in New York.
The median forecast of 37 economists surveyed by Bloomberg for ADP payrolls projected a 131,000 advance. Estimates ranged from 80,000 to 170,000. The previous methodology showed a gain of 162,000 jobs in September.
Today’s report represents a break from the way ADP had calculated employment figures dating back to 2001. Today also marks the first joint release with Moody’s Analytics of West Chester, Pennsylvania. ADP had previously collaborated with Macroeconomic Advisers LLC of St. Louis.
The report now draws on data from 406,000 of Automatic Data Processing Inc.’s corporate customers, up from the 344,000 used in the prior method. Those customers employ 23 million workers, or more than 20 percent of all non-government staff, ADP said in press release announcing the changes on Oct. 24.
Additionally, ADP and Moody’s said the new methodology they developed will better align their figures with those from the Labor Department’s monthly payroll report. The methodology uses data from ADP customers, the Labor Department and the Federal Reserve Bank of Philadelphia’s Aruoba-Diebold-Scotti Business Conditions Index. ADP said its numbers should correlate most closely with the final, revised Labor Department figures, rather than those initially released at the beginning of the month.
Goods-producing industries, which include manufacturers and construction companies, increased their headcounts by 14,000, today’s ADP figures showed. Construction employment rose by 23,000, while factory employment dropped 8,000.
Service providers added 144,000 new jobs. Businesses involved in financial activities boosted staff by 9,000, professional and business services increased headcount by 35,000 and trade, transportation and utilities added 24,000 more workers.
Companies employing 500 or more workers added 81,000 new jobs in October. Employment at medium-sized businesses, with 50 to 499 workers, rose 27,000, and by 50,000 at small companies, ADP said.
Tomorrow’s Labor Department report may show overall hiring including government jobs rose 125,000 last month after rising 114,000 in October, according to the Bloomberg survey median.