Tuesday 28 January 2020

US firms added jobs at fastest rate in eight months in October

Jason Lange

US companies added jobs in October at the fastest pace in eight months, a sign of modest healing in the labour market just days before a presidential election that could hinge on the economy.

Other data on Thursday showed a drop in new claims for jobless benefits last week, although another survey showed planned layoffs rose in October.

Payrolls processor Automatic Data Processing said private employers added 158,000 workers last month. That was the biggest gain since February.

"There is some evidence of labour market improvement," said David Sloan, an economist at 4Cast in New York. "It is not totally convincing yet but overall the message is positive."

The ADP reading was the first under an overhaul of the report's methodology that increased the number of firms sampled. The aim is to make the report a better predictor of the government's payroll report.

The government report, due on Friday, is expected to show non-farm employers added 125,000 jobs in October, according to a Reuters poll taken before the ADP data was released.

Some economists adjust their non-farm payroll forecasts for the ADP data, although analysts are treating ADP's new methodology with caution.

"We're just going to have to learn over the coming months how accurate this new survey is," said Nigel Gault, an economist at IHS Global Insight in Lexington, Massachusetts.

The weak labour market has dominated the presidential campaign and Friday's employment report will give the last jobless rate before Tuesday's election. Polls show a very tight race between President Barack Obama and Republican challenger Mitt Romney.

The US economy has recently shown some signs of health, with consumers spending more freely and home construction picking up. But business investment sank in the third quarter, a sign companies lack confidence in the strength of the economic recovery.

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