President Trump’s economic policies appear to be making strides as private payrolls rise, while the labor market shows resilience against recent fears.
Story Highlights
- Private payrolls increased by 42,000 in October 2025.
- Large companies drive growth, while small businesses struggle.
- Federal Reserve shifts focus from inflation to labor market concerns.
- Government shutdown halts official labor statistics.
Private Payrolls Boost Economic Confidence
Payroll growth at private companies exceeded expectations in October 2025, with an addition of 42,000 jobs. This figure surpasses the Dow Jones consensus estimate of 22,000 jobs and follows a September decline of 29,000.
The new data offers a glimmer of hope amidst fears of a faltering labor market, according to ADP’s latest report. The gains were predominantly driven by large companies employing at least 250 workers, which added 76,000 jobs. In contrast, smaller businesses saw a reduction of 34,000 jobs.
The trade, transportation, and utilities sectors experienced a gain of 47,000 jobs, offsetting losses in other areas such as information services, which saw a decline of 17,000 positions. Education and health services showed promise with an increase of 26,000 jobs, while financial activities added 11,000 roles.
Despite the positive job growth, sectors like manufacturing continue to struggle, partly due to ongoing challenges despite President Trump’s tariffs aimed at revitalizing U.S. factory jobs.
Private payrolls rose 42,000 in October, more than expected and countering labor market fears, ADP says https://t.co/K5GcfafUzL
— CNBC International (@CNBCi) November 5, 2025
Federal Reserve’s Focus Shifts Amid Economic Concerns
The Federal Reserve has expressed concern over the labor market, overtaking its focus on inflation, which remains above the 2% target. In response, the Fed recently approved a quarter percentage point reduction in its key interest rate, now targeted between 3.75% and 4%.
The ongoing government shutdown has resulted in the suspension of official labor statistics from the Bureau of Labor Statistics (BLS), leaving Wall Street and economists relying on alternative data sources to gauge the labor market’s health.
The ADP’s October report highlights a continuation of modest hiring, marking the first positive gain since July.
Despite the growth, the report indicates that pay growth has remained largely flat for over a year. Year-over-year pay for those staying in their jobs rose by 4.5%, while job switchers saw a slight increase of 6.7%.
Impact on Small Businesses and Broader Economic Indicators
The trend away from job growth at small businesses is particularly concerning, given their significant role in hiring. ADP Chief Economist Nela Richardson emphasized that while large companies often make headlines, small businesses are the backbone of hiring, responsible for three out of every four jobs.
This weakness at the small-company level raises concerns about the sluggish recovery.
The suspension of official BLS reports during the government shutdown means that alternative metrics, such as state-level jobless claims and consumer sentiment indices, will be closely watched.
The University of Michigan plans to release its monthly sentiment index soon, providing a snapshot of consumer confidence amid these economic challenges. Recent data from jobs site Indeed indicates that employment postings have reached their lowest since February 2021, underscoring the ongoing uncertainty in the job market.
