ADP Employment: More Strong Gains,  Well Above Expectations

Bottom Line: ADP showed stronger than expected job growth again in October. While there were small negative revisions to prior data, the trend rate of ADP payrolls, which do not include government jobs, is still over 200k per month and even showing hints of acceleration. Service producing jobs, especially those within the trade, transportation and utilities segments, led the gains in October. Overall, this report bodes well for a rebound in Friday's nonfarm payroll report, potentially even more than the 195k conensus after September's slower 134k gains. ADP National Employment ROSE by 227k in October, compared with the consensus estimate for a gain of 187k. Meanwhile, the revisions to the prior 3 months subtracted an additional 18k to the previous estimate. Over the past 12 months, private payrolls have increased by an average of 208k per month, lifting employment to 2.0% ABOVE its year ago level. Jobs in Goods-Producing Industries ROSE by 38k jobs as Manufacturing gained 17k workers. Moreover, Construction gained 17k jobs. Meanwhile, Service-Producing Industries ROSE by 189k jobs with Professional/Business Services hiring 36k workers, Trade/Transport/Utilities adding 61k, and Financial Activities increasing by 4k workers. Small Firms hired 29k workers, Medium-Sized Firms grew by 96k employees while Large Firms added 102k positions.