US Labor Market Plot Twist: ADP Bounces Back, But the Real Test Awaits

Hold up—the US job market just threw everyone a curveball. ADP private sector employment jumped 42,000 in October, smashing the 28,000 forecast. That’s the biggest pop since July. Gold initially dipped $4 on the news, then flipped; USD index ticked up 7 points.

But here’s the kicker: this rebound isn’t broad-based. ADP Chief Economist Nela Richardson put it plainly—hire numbers are still weak compared to earlier this year, and wage growth has flatlined for over a year. Translation: labor supply and demand are balanced, meaning neither side has serious leverage.

The real drama? Government shutdown pulled the actual nonfarm payrolls report offline. Wall Street is bracing for 60,000 job losses this week and unemployment rising to 4.5%. ADP data? Call it a preview, not the final answer—it only covers private companies using ADP’s payroll systems, so it’s not America’s full employment picture.

Meanwhile, layoff intel is flashing red: Amazon, Starbucks, Target all making cuts. Job postings hit their lowest since Feb 2021. Fed officials are sweating labor market weakness now more than inflation.

Bottom line: October looked decent on paper, but the foundations are shakier than they seem.