The US economy recorded an increase in private sector employment in October, while the country’s trade deficit remained elevated. The latest data also included details of the US Treasury’s quarterly borrowing plans, offering investors additional information on employment conditions, international trade and government financing.
According to ADP, private sector employment increased by 86,000 in October, exceeding market expectations of around 67,000 to 69,000. The previous month’s increase was 90,000. However, professional and business services recorded job losses for the third consecutive month.
US Employment Rises 86,000 in October
The ADP report showed that private sector employment increased by 86,000 in October. Pay growth for employees switching jobs accelerated to 7.6% year on year, the fastest pace since March 2024.
Despite the increase in employment, continued job losses in professional and business services indicate that hiring conditions remain uneven across sectors. ADP is a private employment estimate and should not be treated as the official US government payroll report.
CME FedWatch pricing indicated an 81.2% probability of a 25 basis point Federal Reserve rate hike in December, compared with an 18.8% probability of no change. January pricing indicated a 65.5% probability of a cumulative 25 basis point increase and a 20.5% probability of a 50 basis point increase.
US Trade Deficit and Treasury Refinancing Plans
The US trade deficit stood at $105 billion in September, below market expectations of $108 billion and compared with the previous month’s revised deficit of $105.6 billion. Exports increased to $321.5 billion from $315.2 billion, while imports rose to $426.6 billion from $420.8 billion.
The US Treasury set its quarterly refinancing target at $125 billion, in line with expectations. The plan includes a $42 billion 10 year Treasury auction and a $25 billion 30 year auction. A $58 billion three year auction is scheduled for November 9.
The Treasury removed the phrase “at least” from its guidance on maintaining stable auction sizes and expects longer dated auction sizes to remain unchanged. It also outlined adjustments to bill issuance in December and January, alongside plans for seven year auctions involving quarterly new issues and two reopenings. The Treasury maintained its TIPS auction sizes and set a $70 billion repo target for the quarter. Its cash balance is expected to peak at around $1.03 trillion in late November and late January.
How many jobs were added in the US in October?
Private sector employment increased by 86,000 in October, according to ADP.
What was the US trade deficit in September?
The US trade deficit was $105 billion in September, below expectations of $108 billion.
What is the US Treasury‘s quarterly refinancing target?
The US Treasury set its quarterly refinancing target at $125 billion.
Does the ADP report represent official US employment data?
No. ADP is a private estimate of employment trends. The official US employment report is published by the Bureau of Labor Statistics.
