Greetings, welcome to the ADP National Employment Report Media Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, if you have a question, please press the one followed by the four on your telephone. If at any time during the conference you need to reach an operator, please press star zero. As a reminder, this conference is being recorded Wednesday, November 3, 2021. I would now like to turn the conference over to Joanna DiNizio with ADP. Please go ahead.
Good morning, and welcome to the October 2021 ADP National Employment Report Media Conference Call. With us is Nela Richardson, Chief Economist at ADP. Nela will share her thoughts on the October findings, which is derived from ADP's actual data of those who are on a company's payroll and produced in collaboration with Moody's Analytics. She'll take as many of your questions as possible before our hard stop at 9 A.M. Eastern Time. Nela, please go ahead.
Hi. Thanks, Joanna, and good morning, everybody. The U.S. labor market regained its footing in October as the impact of the Delta wave continued to fade, and you can see that in today's numbers. In October, private sector payrolls grew by 571,000 on net. This represents a jump from the third quarter average of 385,000. The good news continues. Gains were broad-based as goods producers added 113,000 jobs in October. That's the strongest reading of the year, while service providers added 458,000. Job gains are approaching 5 million in 2021, though private sector payrolls are about 5 million jobs short of pre-COVID-19 levels. Now, other job data concur that some of these labor market headwinds that were faced in the third quarter are starting to recede.
We've seen jobless claims continue to have improved slowly and are sitting at the lowest level since the pandemic began. The most recent JOLTS data show job openings remain near record highs. That's a good sign of labor demand as businesses continue to look to staff up to meet demand as the impact of the pandemic fades and people are more comfortable going out and engaging in normal economic activities. There are some anecdotal reports that continue to show difficulty in hiring, and that's a concern. The current pace of job growth is still impressive, and we think will fuel a continued recovery. Despite ongoing supply bottlenecks, just turning to that goods-producing sector again, posting solid gains, and we saw that show up in construction by an impressive 54,000 in October, the strongest gain of the year and more than double the current year-to-date average.
Manufacturers also rebounded. The industry added 53,000 jobs in October after averaging 20,000 in the third quarter. This is despite survey evidence suggesting that U.S. manufacturing remains still is seeing some challenges from ongoing supply chain issues. Finally, rounding out that goods sector, natural resources and mining has shown some life after struggling during this recovery. The industry added 6,000 jobs, which is in line with the average over the past three months. The real superstar of this report is private sector service-producing firms, where those jobs rose 458,000 in October. This compares favorably with the average monthly pace of the third quarter of just 385,000 jobs.
It's worth noting this is much slower than the pace that was set in Q2 of 748,000, and that pace was set notably before the rise of the Delta variant starting in mid-July and the slow vaccine rollout. We just saw new evidence that vaccines are now coming close to being available to kids as young as five. That should help reenergize job growth, particularly in travel and tourism, and Leisure and Hospitality. Professional and Business Services grew by 88,000 in October, and that's the strongest gain so far this year. Also impressive, though, is the mix of job creation in that industry. Earlier in the year, gains were skewed towards low-paying Administrative and Support Services segment, but now a strong majority of job growth is coming from higher-paying professional services.
We think that administrative and support service hiring will remain weak until workers return to offices in greater numbers. Likely that will happen next year. Still more news on the service sector front. Education and healthcare remain strong. Gains totaled 56,000 in October following a 54,000- job pickup in September. That's mostly from the healthcare side, but the return of in-person schooling has provided a boost to education payrolls as well. Finally, just hitting that all-important leisure and hospitality sector. It has slowed from earlier progress this year, but it is still making progress. The industry added 185,000 jobs in October and nearly 2 million this year. It's taken the largest hit of any industry and remains about 2 million jobs under the pre-pandemic levels.
The rate of people quitting in this industry, as government statistics have shown, grew up to 6.4% in the month of August as the country was still dealing with the Delta wave. That's had some ramifications, even entering into the fourth quarter, as businesses were still looking to staff up but were having trouble filling those positions. We're still looking at some labor supply issues in that sector that we think will eventually start to resolve themselves in coming months. One more note is on the trade recovery. That sector has stabilized. The industry added just 78,000 jobs in October. That's the strongest pace since May and a significant rebound from the 43,000 jobs pace in the third quarter.
Again, this is an industry, as we've noted before, that's going through some secular structural downturn in terms of the transition from brick and mortar to more e-commerce. Financial services sector, that was in line, adding about 15,000 jobs in October, so it's really kind of mirroring the year-to-date average. Finally, let's talk about company size, because firms with more than 1,000 workers added 305,000 jobs in October. This marks the second straight month of impressive gains, and the average growth over the last two months is triple that from a much weaker July and August as the Delta wave seemed to hit large companies particularly hard. Small and mid-sized companies came in at about 115,000 jobs each.
The newfound dominance of large firms is particular to the current environment and the ongoing struggles of firms to find and hire workers. I'd like to just round out these overall insights with some comments about the economy and what's ahead. We know that the Delta variant had a big impact on economic activity in Q3. GDP growth slowed to 2% due to a combination of the virus uptick and supply shortages, particularly in automobiles. At the same time, fiscal support has started to recede, and that's had an effect on consumers, with personal incomes dropping and the savings rate falling back to pre-pandemic levels. That means that consumers have a bit less cushion going into the fourth quarter. We're also seeing the Delta variant become more under control.
As I mentioned earlier, vaccines will soon be available to kids five through eleven. That'll allow some families with young children to widen their scope of activities. Many of them have been still a bit isolated through the third quarter because of, you know, family members that are still unprotected by the vaccine. We think that the jobs market is reflecting going into this last three months of the year, a better degree of viral containment, shaking off some of those negative effects in the third quarter. All of this is encompassed with what we see as a continuation of an unprecedented amount of flux among the workforce with the number of people leaving still at record highs.
Fortunately, these quits are voluntary as opposed to the involuntary quits and separations that we saw last year. It's also worth noting, and we saw this in the September employment situation report from the BLS, that the long-term unemployed, those who are out of work 27 weeks or more, are still, even 18 months into the recovery, a third of overall unemployment. That compares to less than 20% before the pandemic hit. Despite job openings being near record highs, there are still people sitting on the bench waiting to get into the game, waiting to get hired. As labor shortages were a common theme this year, we think that their impact will likely fade as these bottlenecks to hiring also fade.
With that, you know, more evidence in October that the jobs recovery continues, and we're expecting solid gains in coming months. Joanna, that ends my comments. I would welcome any questions.
Thank you, Nela. Operator, we are ready for questions.
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Thank you everyone for joining this month. We look forward to having you back here for the next report, which will be released on December 1. The call is now concluded.
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