US DATA: ADP Confirms Payroll Stabilization In October, Trend Still Very Soft

ADP private payrolls growth stabilized in October after two monthly declines, coming in between Bloomberg consensus and last week’s fresh ADP New Pulse report along with minimal revisions. The combination drove only a marginal hawkish reaction.

• ADP employment change: 42k (cons 30k) in October after -29k (initial -32k) in Sept and -3k (initial -3k) in Aug.  
• Whilst a small beat of consensus at 30k, it’s also not as solid as the 57k implied by last week’s newly published weekly series for the four weeks ending Oct 11, i.e. just shy of the reference period used for this month’s October report.
• The three-month average now stands at just 3k despite this latest increase. It has steadily declined from a recent peak of 206k in Nov 2024, moderating in all but one month since then.
• These private sector job gains look concentrated, with “trade, transportation & utilities” seeing +47k after two weak months, “education & health” +25k and “financial activities” +11k.
• Largest declines were seen with information -17k, professional business services -15k and other services -14k. That’s a third straight monthly decline for professional business services, information and leisure & hospitality.
• Largest firms continue to see most resilience: those with 500+ employees saw headcount rise by 74k compared to a next highest of 5k for those with 20-49 employees. That follows September when only firms with 500+ employees saw net job creation.
• There’s no clear story behind which of the smaller firms are most heavily affected though, with firms with 50-249 employees seeing a second month of largest declines, outstripping declines in the smallest 1-19 employee category.