Private job growth slowed sharply in October as the US economy grappled with new spikes in coronavirus cases across the country. According to payroll processing group ADP, the private sector grew by a mere 365,000 jobs last month, far fewer than had been forecast.
Service-based businesses were responsible for most of October’s hiring, in particular hospitality which was most severely impacted by the virus-related shutdown earlier this year. An estimated 125K new hospitality jobs were added and health services grew by nearly 80K new jobs. With the recent resurgence of Covid-19 cases, the health services sector will be interesting to watch through the winter months.
The remainder of jobs added last month were spread across other sectors including professional & business services, construction & manufacturing, and natural resource-based jobs such as mining. While October’s job additions are viewed as lackluster, it is notable in that job creation did continue across multiple sectors.
“The labor market continues to add jobs, yet at a slower pace,” said Ahu Yildirmaz, vice president of the ADP Research Institute. “Although the pace is slower, we’ve seen employment gains across all industries and sizes.”
The government’s official numbers are due to be released tomorrow morning. The Fed will release its associated statement at 2pm ET, followed by a news conference at 2:30. Announcements such as job reports can cause unexpected fluctuations in financial markets and traders should take appropriate measures to protect risk capital.
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