ADP: Businesses added 182,000 jobs in October

Businesses added 182,000 jobs in October, payroll processor ADP said Wednesday, in a possible sign that employment growth largely bounced back after a two-month slump.

Economists surveyed by Bloomberg estimated ADP would tally 180,000 job gains. They predict the Labor Department's closely watched survey of private and public sector hiring out Friday will record 182,000 new jobs.

That employment report, and another for November, will be key in helping the Federal Reserve decide whether to raise its benchmark interest rate for the first time since 2006. The Fed held off on a rate hike last month but said it could act in December if economic reports are encouraging.

Barclays Capital wrote in a note to clients that 175,000 job gains in Labor's report could be enough to allay Fed concerns and help prompt policymakers to make a move.

In October, ADP said, small businesses added 90,000 jobs, midsize ones, 63,000, and large companies, 29,000.

Construction and trade, transportation and utilities each added 39,000 jobs, while professional and business services added 13,000. But the manufacturing and energy sectors continue to cut jobs in response to a strong dollar and low oil prices that have hurt exports, factory output and business confidence.

ADP tries to foretell Labor's private-sector payroll count but often differs significantly. ADP tallied 200,000 gains for September but Labor recorded just 142,000 and revised down August additions to 136,000 -- well below the 200,000-plus monthly pace in the first seven months of the year.

ADP's measure of job growth "is not slowing meaningfully in contrast with the recent slowdown in the government's data," said Mark Zandi, chief economist of Moody's Analytics, which helps ADP compile the report.

Some economists note that other labor market indicators, such as initial jobless claims, which reflect layoffs, remain near prerecession levels and that the disappointing government data may still be revised up.

The modest government totals, however, are consistent with a recent dip in the economy.The government reported last week that growth slowed to an estimated 1.5% annual pace in the third quarter. Economists were still encouraged because solid consumer spending and a recovering housing market underpinned healthy domestic demand.