WASHINGTON – U.S. companies added 230,000 jobs in October, the most in four months and a sign that businesses are still willing to hire despite signs of slowing growth overseas.
Payroll processer ADP said Wednesday that the job gains were slightly ahead of the 225,000 added in September, which was revised up from an initial estimate of 213,000. Job gains above 200,000 are usually enough to lower the unemployment rate.
The data indicates that steady growth in the past six months has encouraged businesses to step up hiring. That could lead to a healthy job gain in Friday’s government report on jobs and unemployment. The ADP numbers cover only private businesses and sometimes diverge from the government’s more comprehensive report, which includes government agencies.
Economists forecast that the government’s report will also show that employers added 230,000 jobs in October, according to a survey by FactSet.
Mark Zandi, chief economist at Moody’s Analytics, said that faltering economies in Europe, China and Japan haven’t yet caused U.S. employers to pull back on adding workers.
“I don’t think what’s going on overseas is going to undermine the very strong numbers we’re seeing right now,” he said.
However, it’s too early to say that other international trends, such as the strengthening dollar, will have no impact in the coming months, Zandi added. A stronger dollar makes U.S. exports more expensive overseas.
In fact, U.S. exports slowed in September, the government said earlier this week, a sign that weakness overseas may already be hitting some companies. Weaker overseas sales caused the trade deficit to jump 7.6 per cent in September.
The job gains in the ADP report were broad-based: Construction firms added a solid 28,000 jobs, while manufacturing gained 15,000 positions. Professional and business services, which include mostly higher-paying positions such as accountants and engineers, gained 53,000.
Hiring has been strong this year, partly fueled by average growth of about 4 per cent at an annual rate in the April-June and July-September quarters. Employers have added an average of 227,000 jobs a month in 2014, which puts this year on pace to be the strongest year for job creation since 1999.
Other recent reports suggest that Friday’s government jobs report could be a healthy one. Manufacturers hired at a faster pace in October than in the previous month, according to a survey by the Institute for Supply Management, a trade group.
And applications for unemployment benefits have fallen to 14-year lows, evidence that employers are cutting very few jobs.