Private payrolls rose 42,000 in October, more than expected and countering labor market fears, ADP says
News Summary
ADP reported that U.S. private payrolls increased by 42,000 in October 2025, surpassing Dow Jones' consensus estimate of 22,000 and rebounding from a September decline of 29,000. This offers some hope amidst concerns about a weakening labor market. The job growth was primarily driven by large companies with 250+ employees, with significant contributions from trade, transportation & utilities, and education & health services sectors. Despite the AI-fueled tech boom, information services saw a decline in positions, while manufacturing continues to struggle even with President Trump's tariffs. Wage growth persisted, with year-over-year pay for job stayers rising 4.5% and for job switchers increasing 6.7%. Federal Reserve officials have prioritized concerns over the labor market's state above the 2% inflation target, approving a quarter-percentage-point rate cut last week to 3.75%-4%. The official Bureau of Labor Statistics nonfarm payrolls report was suspended due to a government shutdown, with Wall Street having anticipated job losses and a higher unemployment rate.
Background
In 2025, the U.S. labor market has been under close scrutiny as the Federal Reserve navigates balancing persistent inflation above its 2% target with risks of slowing economic growth. Despite an AI-driven tech boom, some sectors, particularly manufacturing, continue to face structural challenges, contrasting with the Trump administration's trade policies aimed at revitalizing domestic industry. The government shutdown has led to delays in crucial economic data releases, such as the Bureau of Labor Statistics' nonfarm payrolls report, increasing market uncertainty. Against this backdrop, the Federal Reserve has continued to adjust its monetary policy, with a recent rate cut reflecting its growing concern over labor market conditions, suggesting a pivot in its policy focus from inflation combat to employment support.
In-Depth AI Insights
Q: Given ADP's report highlights job growth concentrated in large companies and ongoing struggles in manufacturing, how does this impact the Trump administration's economic narrative and investor confidence? A: The private payroll growth driven primarily by large corporations, coupled with job losses in smaller businesses and persistent struggles in manufacturing, could undermine the Trump administration's