The private sector added 158,000 jobs in October, according to the latest estimate from payroll processing firm ADP. The figure comes in above expectations and may mean that a better-than-expected October jobs report is coming on Friday.
"October's job gains were in line with the average monthly gains of the past two years, with sturdy albeit less than stellar growth across most industries and company sizes," said Mark Zandi, chief economist of Moody's Analytics, in a statement accompanying the release.
Consensus expectations are for the government's report to show 125,000 new jobs in the private and public sectors together, according to Bloomberg. Zandi says that while government may have subtracted some jobs from the economy, he still expects payrolls to show that they added 130,000 to 140,000 new workers last month. But he emphasizes that these are still very modest job gains.
"We need to see stronger job growth in order to bring down the unemployment rate," said Zandi in a conference call with reporters following the release.
The construction industry showed renewed strength last month, adding 23,000 new jobs by ADP's count. Given the industry's continued weakness since the housing collapse, this may be one of the brightest spots in the report.
"The construction sector—housing and commercial real estate—has been a real drag on the economy, drag on the job market," said Zandi. "That's turning. I expect it to continue to turn."
Other industries also contributed strongly to October's number. Trade, transportation, and utilities added 24,000 jobs, and professional and business services added 35,000. Meanwhile, manufacturing was weak last month, subtracting 8,000 workers. Manufacturing also lost 16,000 jobs in September, according to the Labor Department. However, Zandi believes that the downturn in manufacturing is temporary, due in part to the continued troubles in Europe.
Broadly speaking, American hiring won't accelerate significantly until the uncertainties related to the fiscal cliff are resolved, he added.
"I don't think businesses are confident enough to really go out and hire aggressively until they can construct a narrative with regard to what we're going to do about the fiscal cliff," he said.
According to the latest projections from the Congressional Budget Office, allowing tax cuts to expire and spending cuts to kick in at the end of the year could send the U.S. economy into a recession next year and also push the jobless rate above 9 percent.
The October ADP report is the first since the company started producing the report with Moody's Analytics and changed its methodology, in an attempt to improve accuracy and bring the reports more closely in line with finalized Labor Department numbers.
The ADP report comes alongside yet more positive jobs news. The Labor Department reported this morning that last week's initial claims for unemployment insurance also beat expectations, falling to 363,000.
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Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. You can follow her on Twitter or reach her at firstname.lastname@example.org.