US: Private Srctor Hiring Slowed Further in October

According to the ADP employment report, US private sector hiring slowed in October to the lowest level since April. Employment in the private sector increased by 130 000 this month, below the consensus estimate, which was looking for an increase by 150 000. The previous figure was downwardly revised from 166 000 to 145 000. Looking at the details, employment growth picked up in the goods-producing sector, from 16 000 in September to 24 000 in October. Construction payrolls increased by 14 000, while manufacturing payrolls rose by 5 000. The slowdown in hiring was based in the services sector, where employment increased by 107 000, down from 130 000 in the previous month. Hiring held up well in trade and transportation (40 000), but was somewhat disappointing in professional & business services (20 000). In the financial sector, the number of jobs fell by 5 000. Details by company size show that hiring slowed among small firms, but picked up among larger enterprises. The further slowdown in US private sector hiring is disappointing, but we believe that it was at least partly due to the government shutdown and political crisis which might have convinced firms to delay new hiring. The slowdown was mainly based in smaller firms which might be more vulnerable to political uncertainty