ADP Employment: Solid Gains

Bottom Line: Private sector employment rose moderately in October, more than expected. Gains were seen in construction while the segment that includes utilities saw declines. Both of these segments were likely impacted by hurricane recovery efforts. Professional and business services also saw a very strong gain, up 110k versus a 6-month average of 159k. Overall, these data point to continued solid gains in the labor market in October, and suggest modest upside potential to Friday's 310k estimate for non-farm payrolls. ADP National Employment ROSE by 235k in October, stronger than market expectations for a gains of 200k. Meanwhile, the revisions to the prior 3 months subtracted an additional 25k to the previous estimate. Over the past 12 months, private payrolls have increased by an average of 212k per month, lifting employment to 2.1% ABOVE its year ago level. Jobs in Goods-Producing Industries ROSE by 85k jobs with Manufacturing gaining 22k workers. Moreover, Construction gained 62k jobs. Meanwhile, Service-Producing Industries ROSE by 150k jobs with Professional/Business Services hiring 110k workers, Trade/Transport/Utilities substracting -50k, and Financial Activities increasing by 9k workers. Small Firms hired 79k workers, Medium-Sized Firms grew by 66k employees while Large Firms added 90k positions.