NEW YORK (Reuters) - U.S. companies added 158,000 jobs in October, data from payrolls processor ADP showed on Thursday in a revamped report on the private sector labor market.
The historical data for the ADP National Employment Report was revised as part of the new methodology, which was used for the first time in the October report. September’s increase has halved to 88,200 new jobs from an initially reported 162,000.
The number of Americans filing new claims for unemployment benefits fell last week. Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 363,000, the U.S. Labor Department said on Thursday. That was below the median forecast in a Reuters poll of 370,000.
An analyst from the department said New Jersey and Washington, D.C., did not turn in data due to the mammoth storm Sandy, which hit the Northeast earlier this week. The Labor Department estimated results for the state and for the nation’s capital. Economists have said the storm could lead to volatility in jobless claims over the coming weeks.
The four-week moving average for jobless claims, which smoothes out volatility, dropped 1,500 to a 367,250. Economists generally think a reading below 400,000 points to an increase in employment.
Continuing claims for jobless benefits rose 4,000 in the week ended October 20 to a seasonally adjusted 3.263 million, the Labor Department said.
“I think markets have already begun to be quite wary of ADP’s lack of predictability. I think that’s exactly what’s driving some of these revisions. Hopefully they get it right and have a much better sense of what’s to come in the nonfarm payrolls. Time will tell.”
“We’ve been surprised by some of the magnitudes of the increases or decreases in ADP before and they have not suggested such significant changes in nonfarm payrolls.”
NIGEL GAULT, CHIEF U.S. ECONOMIST, IHS GLOBAL INSIGHT, LEXINGTON, MASSACHUSETTS:
“I really don’t know what to say about them (ADP) because the numbers are on a different methodology, and we have no track record at all on this new methodology.
“We can look and see what this new methodology does historically, but that’s quite another thing from judging what it’s going to do on a forward basis.
“The number doesn’t have any effect on my thinking for the payrolls number on Friday, which I have at 125,000. This 158,000 private number out of ADP isn’t something that is going to change my view on that.
“We’re just going to have to learn over the coming months how accurate this new survey is. It’s going to take time before people feel comfortable enough to place a lot of weight on it.”
JOSEPH TREVISANI, CHIEF MARKET STRATEGIST, WORLDWIDE MARKETS, WOODCLIFF LAKE, NEW JERSEY:
“Initial jobless claims have reverted to form. They are not improving and they are not worsening. They indicate little for the job market or for the dollar.”
“(Jobless claims) are encouraging. There shouldn’t be any distortions from the hurricane yet. It seems with the ADP message there is some evidence of labor market improvement. It is not totally convincing yet but overall the message is positive and people might be getting a bit more optimistic on the payrolls number.”
“They (jobless claims) were just about as expected. There’s really not a lot going on that’s noteworthy, I’m sorry to say. They’ve been in this range for some time, 360 to 380 range, so this was just below that. It’s telling us that there’s not a lot of change in the economy. For most of the year we’ve been averaging very close to this and not seeing much of a change in the trend…. It just indicates that the labor market is stable.”
Americas Economics and Markets Desk