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Key ADP Report Highlights: How Many New Jobs in October?

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The ADP National Employment Report

The ADP National Employment Report for October 2016 came out on Wednesday, November 2, 2016. The ADP report indicates a slower increase in private-sector employment in October at 147,000 jobs, as compared to the market expectation of 165,000. In September 2016, it stood at 202,000.

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Key highlights of the October report

On a sectoral basis in October, the service-providing sector added 165,000 jobs, while professional businesses added 69,000 jobs, and financial activities (XLF) added 18,000 jobs. Trade, transportation, and utilities (XLU) together added 17,000 jobs.

The October private payroll employment figure of 147,000 included an additional 34,000 employees in the small business category, with about 48,000 in the medium business category and around 64,000 in the large business category.

Impact on markets and rate hike probability

The private job figures in October signaled a modest growth condition among US (IWM) (QQQ) (VOO) private businesses. However, the non-farm payroll detailed in the October jobs report didn’t meet market expectations.

After a dovish stance in September, the probability of a rate hike by the Fed in December sharply increased following the labor market’s improvements in June and July. Now, however, after subdued labor market performances in September and October, investors remain unsure about what would be the first 2016 rate hike in December.

In the next and final part of this series, we’ll analyze the indicators that investors should look at this week.

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