Small- and medium-sized U.S. businesses ramped up hiring in October, clocking up the second highest monthly gain in job growth for 2014.
Private-sector payrolls in the U.S. grew by 230,000 in October, according to a report by payroll processor Automatic Data Processing and analysis provider Moody’s Analytics — growth that matched what observers had projected.
The gain was fueled by sharp increases for medium-sized businesses, which added 122,000 jobs last month, and the 102,000 jobs added by small businesses. ADP classifies medium-size businesses as those with 40 to 499 employees. Small businesses have fewer than 50.
“Job growth is strong and broad-based across industries and company sizes,” said Mark Zandi, chief economist of Moody’s Analytics.
The professional/business services sector added the most jobs last month, 53,000. Job growth was also strong for the construction, manufacturing, and trade/transportation/utilities sectors.
The labor market has strengthened of late, bolstered by U.S. economic growth that has encouraged employers to add jobs and issue fewer pink slips. The Federal Reserve and economists have been encouraged by the broad-based nature of those new jobs, though weak wage growth has been problematic.
Zandi said with unemployment and underemployment quickly declining, better progress could soon be made on the wage front.
“The job market will soon be tight enough to support a meaningful acceleration in wage growth,” Zandi said.
The ADP report was issued two days before the federal government’s monthly jobs report, which includes the unemployment rate. Economists expect that report to show U.S. hiring climbed by 240,000 in October, while the nation’s unemployment rate is expected to remain unchanged at 5.9%.