2014 Government Regulations & Business Summit
Join PBN and our sponsors for our Government Regulations & Business Summit on Th ...
By Jeanna Smialek
By Jeanna Smialek
WASHINGTON – Companies added fewer workers than projected in October, indicating the U.S. job market lost momentum amid budget strife in Washington, a private report based on payrolls showed Wednesday.
The 130,000 increase in employment was the smallest in six months and followed a revised 145,000 gain in September that was weaker than initially estimated, according to the ADP Research Institute in Roseland, N.J. The median forecast of 39 economists surveyed by Bloomberg called for an advance of 150,000 jobs.
The monthly figures are the first to show how employment fared during a 16-day partial federal shutdown that started Oct. 1 and resulted in the furlough of some contractors and other workers. Federal Reserve policy makers meeting Wednesday are watching job-market progress as they debate when to scale back record monetary stimulus.
“Most labor market indicators point to moderate employment growth across private sector industries, but there is an elephant in the room, which is the government shutdown,” Ryan Wang, an economist at HSBC Securities USA Inc. in New York, said before the report. “It’s another factor that may have caused private employers to be cautious about hiring.”
Stock-index futures held gains after the figures, signaling equities will extend a four-day rally that has driven the Standard & Poor’s 500 Index to a record. The contract on the S&P 500 expiring in December rose 0.2 percent to 1,770.2 at 8:31 a.m. in New York.
A report from the Labor Department showed the cost of living rose as projected in September as fuel charges picked up, capping the smallest year-to-year gain in five months. The consumer-price index increased 0.2 percent after a 0.1 percent gain the prior month. The CPI climbed 1.2 percent in the 12 months through September, the smallest gain since April.
Estimates in the Bloomberg survey for ADP employment ranged from gains of 70,000 to 177,000 after a previously reported increase of 166,000 in September.
Manufacturers, builders and other goods-producing industries increased headcount by 24,000. Employment in construction climbed by 14,000, while factories added 5,000 jobs, Wednesday’s report showed. Trade, transportation and utility companies added 40,000 jobs.
Payrolls at service providers rose by 107,000 in October.
Companies employing 500 or more workers added 81,000 jobs. Medium-sized businesses, with 50 to 499 employees, took on 13,000 workers and small companies expanded payrolls by 37,000.
The shutdown closed national parks, halted some services, and resulted in some furloughs by government contractors. The closing resulted in at least $24 billion of lost economic output, according to Standard & Poor’s. President Barack Obama’s chief economic adviser said last week that it cost the U.S. 120,000 jobs in October.