#10月非农数据聚焦 ADP beats expectations: How will October’s nonfarm payrolls affect the Fed’s rate-hike outlook?

ADP private-sector employment data released Wednesday beat expectations, with hiring broadening across more industries, signaling some improvement in the weak U.S. labor market. Attention now turns to Friday’s nonfarm payrolls report; if it shows a resilient labor market, it could put pressure on the monetary policy outlook.
Solid data: ADP said U.S. businesses added a modest 86,000 jobs in October for a second consecutive month, exceeding Wall Street’s forecast of 75,000.
By industry, transportation added 39,000 jobs, its biggest increase in nearly two years. Healthcare providers were once again the main driver of hiring, as they have been over the past few years. Hotels, restaurants, financial firms, and construction companies also added more jobs.
ADP Chief Economist Nela Richardson said: “Employers of all sizes hired last month, and our data show that job changers were attracted by bonuses, overtime, more working hours, and higher base pay.”
The ADP report is a leading indicator of the official U.S. employment report on Friday. Based on information collected by the Bureau of Labor Statistics, economists forecast that 59,000 jobs were added in October. The two reports can differ significantly from month to month, but their direction is consistent over the long term.
The U.S. labor market has lost momentum over the past two years, with layoffs at historically low levels—but hiring has also been subdued. Since mid-2024, the economy has added far fewer than 100,000 jobs per month, less than half the historical average.
What will the Fed decide? Market participants believe a surprisingly hot jobs report could affect the number and timing of future rate hikes.
Despite the uncertainty caused by the war between the U.S. and Israel and Iran, the labor market has remained resilient. The Bureau of Labor Statistics reported Tuesday that there were 1.06 job openings per unemployed person in September, up from 1.02 in August.
The October employment report arrives at a critical moment in the Fed’s policy discussions.
Institutions forecast that nonfarm employment will increase by 65,000 in October, up from 29,000 in September, with the unemployment rate holding at 4.2%. Wage growth is expected to rise from 0.1% to 0.3%, with year-over-year growth at 2.9%. The average workweek is expected to remain unchanged at 34.4 hours.
Federal funds rate futures pricing indicates that the Fed is expected to hike rates again in December and in 2027.
But a hot jobs report could change that outlook—a strong employment report would allow the Fed to focus more on its inflation mandate, which could mean markets need to reconsider the two additional rate hikes currently expected.
As a more important measure of labor market health, the Aggregate Weekly Employees of All Employees index has stabilized since bottoming in December 2025 and appears to be maintaining steady growth. Although the growth rate is consistent with pre-pandemic labor market levels, averaging 4% to 5% annually, the problem is that inflation remains high, eroding real wages. This is also why the Fed needs to pay more attention to this area.