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Inside The ADP Jobs Report - October 2021
Bottom Line: The jobs story in the private sector was a complicated one in September. On one hand job growth was the best it’s been in three months. On the other hand, the breadth of the job gains wasn’t good at all. On one hand, every industry added jobs during the month – the first time we’ve seen that happen in over six months, on the other hand, the size of the gains show signs of being driven by seasonal hiring factors.
According to the ADP Report, reflecting the growth in private sector jobs in September, there were 568,000 private sector jobs added. That included...
- Small businesses: +63,000
- Midsized: +115,000
- Large: +390,000
That’s exactly the opposite of what we’d like to see. Based on job openings it appears smaller companies are really struggling to compete with larger companies in recruitment. We’ve seen this dynamic exacerbate throughout the year as we’ve had more job openings than people searching for work. The resulting wage inflation is far more easily absorbed by large companies as compared to their smaller counterparts. Add in benefits, which commonly larger companies are more readily able to provide, and it’s creating a significant disruption to traditional job creation. In a typical jobs recovery, small companies hire at a greater rate than large companies, as small companies are commonly forced to shed the most employees during difficult economic times. The last month small companies outhired large companies was in May.
These were the top industries for hiring in September:
- #1: Leisure and Hospitality
- #2: Education & Health
- #3: Professional & Business
This is the fourth consecutive month leisure and hospitality and education and healthcare jobs have been at the top. It’s clear the hospitality jobs leading the way for four straight months are a COVID recovery story. The next best story during the month was continued strong employment within the manufacturing and construction industries. That’s good news as it’s a leading economic indicator – but also because progress in hiring in those industries can help mitigate supply chain issues and improve the speed at which projects are completed. Tomorrow we’ll get the full jobs picture with government jobs added in. More to come...