After last month’s uptick in construction, ADP now predicts yet another drop in its monthly National Employment Report.
Overall, the company predicts an increase of 147,000 in total nonfarm private sector employment in October. This is compared to September’s increase of 156,000.
“Job growth appears to be shifting from small to large companies due to the lessening impact the global economic environment had on large companies earlier in the year,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute.
“This is also true because large companies often have the resources to attract workers with better pay and benefit packages,” Yildirmaz said.
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(Source: ADP, Moody’s Analytics)
“Job growth remains strong although the pace of growth appears to be slowing,” Moody’s Analytics Chief Economist Mark Zandi said. “Behind the slowdown is businesses’ difficulty filling open positions. However, there is some weakness in construction, education and mining.”
Here is a breakdown of the sectors where the changes occurred:
The goods-producing sector decreased by 18,000 with decreases in these areas:
Construction: Decrease of 15,000
Manufacturing: Decrease of 1,000
Natural resources, mining: Decrease of 2,000
The service providing sector increased by 165,000 with increases in these areas:
Trade, transportation and utilities: Increase of 17,000
Information: Increase of 3,000
Financial activities: Increase of 18,000
Professional, business services: Increase of 69,000
Education, health services: Increase of 22,000
Leisure, hospitality: Increase of 38,000
Other services: Decrease of 2,000
The decrease in construction does not bode well for housing, which is already struggling with low inventory levels and high home prices. Many of the gains, however, occurred in the professional and business sector, which could help consumers afford higher-priced homes.