Hiring by U.S. companies increased less than expected in October, the latest sign that the labor market is starting to cool in the face of higher interest rates, according to the ADP National Employment Report released Wednesday morning.
Companies added 113,000 jobs last month, below the 150,000 gain that economists surveyed by Refinitiv predicted but higher than the unrevised 89,000 increase recorded in September.
The weaker-than-expected report comes in the wake of an aggressive tightening campaign by the Federal Reserve, which has hiked rates to the highest level since 2001. Fed officials, including Chair Jerome Powell, have opened the door to at least one more hike this year – and have signaled that rates will remain elevated for longer as they assess whether high inflation has retreated for good.
In a potentially welcoming sign for the Fed as it tries to wrangle inflation under control, wages continued to moderate in October.
Annual pay rose 5.7% last month, the 13th straight month of slowing growth, according to the report. For workers who switched jobs, wages climbed 8.4%, down from 9% the previous month.
“No single industry dominated hiring this month, and big post-pandemic pay increases seem to be behind us,” said Nela Richardson, ADP chief economist. “In all, October’s numbers paint a well-rounded jobs picture. And while the labor market has slowed, it’s still enough to support strong consumer spending.”
This is a developing story. Please check back for updates.