The private-sector job market contracted slightly in late October, according to newly released weekly data from payroll-processing firm ADP, revealing that the month’s seemingly positive employment gains were heavily front-loaded and disguised underlying weakness as hiring momentum collapsed in the latter half of October.
Private-sector employers shed an average of 11,250 jobs per week during the four weeks ending October 25, ADP reported, marking a concerning reversal that suggests the labor market “struggled to produce jobs consistently during the second half of the month.”
With official government statistics unavailable, economists and Federal Reserve policymakers must rely on alternative indicators like ADP’s employment estimates, initial jobless claims data (when available), and private sector surveys to gauge labor market health. This reliance on non-governmental sources creates uncertainty, as these measures don’t always align with official BLS statistics.
The shutdown is expected to end this week following the Senate’s bipartisan vote on a funding bill, though the legislation still requires House approval and Presidential signature. Even after the government reopens, economists want to know when the Bureau of Labor Statistics plans to release its estimates of job growth for the past two months—and whether those reports will come out simultaneously or be staggered.
Economists: Labor Market “Tepid at Best”
Economists say job growth has been tepid at best since September, and the unemployment rate could have risen from the 4.3% level recorded in August—the last official reading before the government shutdown suspended data releases.
The consensus view among labor economists suggests the employment situation has deteriorated over the past two months, though the magnitude remains uncertain without official government statistics. Factors pointing to weakness include:
Declining Job Creation: ADP data showing job losses in August and September, followed by front-loaded October gains that turned negative by month’s end
Sector-Specific Weakness: Concerns about leisure and hospitality, professional services, and information technology sectors shedding positions
Small Business Caution: Reports of smaller employers becoming increasingly hesitant to add workers amid economic uncertainty
Elevated Initial Claims: When available, jobless claims data has suggested rising layoff activity
Labor Market Tightness Fading: The ratio of job openings to unemployed workers has been declining, indicating loosening conditions
