U.S. private payrolls rise by 86,000 in October, ADP says

Private employers in the United States added more jobs than expected in October, indicating a robust labor market ahead of the Federal Reserve's interest rate decision next month. According to figures from data processor ADP, private payrolls rose by 86,000 last month, matching a downward revision from September's total. Economists had expected an increase of 67,000 jobs.

ADP's Chief Economist, Nela Richardson, noted that employers across all sizes were hiring, and workers were attracted by bonuses, overtime, and increased hours, in addition to higher base pay. This led to the fastest pace of earnings growth for these workers since March 2024.

The ADP report, developed in coordination with the Stanford Digital Economy Lab, was released ahead of more comprehensive government job numbers expected on Friday. While ADP is not always a reliable indicator compared to the Bureau of Labor Statistics (BLS) report, the BLS estimates nonfarm payrolls increased by 63,000 in October, up from 29,000 in the previous month. The unemployment rate is expected to remain at the same level as September, at 4.2%.

Earlier this week, another data point indicated that U.S. job openings soared in September, while layoffs fell to their lowest level in 1-1/2 years. This has led some economists to believe that the employment picture is stable, despite a less impressive nonfarm payrolls reading for the month. Some economists view the steady employment situation as a positive sign, which could support the case for the Fed to raise borrowing costs during their final rate decision of the year in December.

Currently, there is a 79% chance the central bank will hike rates next month, according to CME FedWatch.