Private sector added 86K jobs in October

• Key Insight: The real reason professional and business services are shedding jobs involves corporate preparation for major shifts.
• Expert Quote: "Those deep losses are certainly stronger than what we saw in the third quarter" — Nela Richardson, chief economist, ADP
  

Private sector employment grew by 86,000 jobs in October, while workers' base pay rose 3.2% and gross pay increased 4.7% year over year, payroll giant ADP reported Wednesday.

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However, the professional and business services sector, which includes accounting and tax preparation services, shed 27,000 jobs.

"It's a sector that's been weak this entire year," said ADP chief economist Nela Richardson during a conference call Wednesday. "It's something to watch. Those deep losses are certainly stronger than what we saw in the third quarter, so a weak sector in October, something to watch through the remainder of the year."

Overall the service-providing sector added 82,000 jobs in October, including 15,000 in financial activities such as banking, 39,000 in the combined trade, transportation and utilities sector, 28,000 in education and health services, and 19,000 in the leisure and hospitality industry. The goods-producing sector added 4,000 jobs overall, including 13,000 added in the construction industry, minus 8,000 lost in natural resources and mining, and 1,000 lost in the manufacturing industry.

Small businesses with between one and 19 employees added 21,000 jobs, while those with between 20 and 49 employees added 7,000 employees. Medium establishments with between 50 and 239 employees gained 22,000 jobs, while those with between 250 and 499 employees added 11,000 jobs.  Large establishments with 500 employees or more gained 24,000 jobs.

Base pay rose 3.0% year over year for people who stayed at their jobs, and 4.8% for job-changers. For professional and business services, the rate was 3.2%.

The impact of Tuesday's election results on the job market for professional and business services is uncertain. 

"I don't think the election changes a little hesitancy on professional and business services as companies try to adapt or change their business practices in anticipation of both demographics and new technology," said Richardson. "In the short term, I don't see a lot of changes. Longer term, who knows? We'll have to see what gets put forward. But in the short term, the job market's resilience continues, and I think that's a great lever in the economy for workers, and that's what I'm most concerned about right now."

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