 "US economic data support Dec rate hike: Yellen")
US private employers maintained a steady pace of hiring in October and a jump in new orders buoyed activity in the services sector, suggesting the economy was strong enough to support an interest rate hike from the Federal Reserve in December.
The economic outlook was further brightened by another report on Wednesday showing the trade deficit hit a seven-month low in September as exports rebounded, a tentative sign the worst of the drag from the stronger dollar may be over.
Fed Chair Janet Yellen told lawmakers on Wednesday the US economy is "performing well" and a December rate hike could be justified.
The ADP National Employment Report showed private payrolls increased 182,000 last month on top of the 190,000 jobs added in September. Job gains last month were broad-based, though manufacturing lost 2,000 positions.
The ADP report, which is jointly developed with Moody's Analytics, was released ahead of the Labor Department's more comprehensive employment report on Friday.
According to a Reuters survey of economists, nonfarm payrolls increased 180,000 in October, well above the average gain of 139,000 jobs for August and September.
Economists say the expected October job gains would be seen as sufficient for the Fed to raise its benchmark overnight interest rate from near zero at its December 15-16 policy meeting.
The unemployment rate is forecast to be steady at 5.1 per cent. In a separate report, the Institute for Supply Management said its non-manufacturing index rose to 59.1 last month from a reading of 56.9 in September. A reading above 50 indicates expansion in the sector, which accounts for more than two-thirds of the US economy.
A gauge of new orders received by services industries rose a sturdy 5.3 percentage points to 62 and employment increased to 59.2 per cent from a reading of 58.3 in September. Fourteen services industries reported growth last month. Only mining reported a contraction.
"It suggests that the service sector has hardly skipped a beat despite signs of weakness in other parts of the economy," said Millan Mulraine, deputy chief economist at TD Securities in New York. "The US economic recovery is off to a very strong start in the fourth quarter after the subpar performance in the third quarter."
The economy expanded at a 1.5 per cent annual rate in the July-September period, hurt by a slow pace of inventory accumulation and ongoing spending cuts by energy firms.
The dollar rose against a basket of currencies on Wednesday, getting an additional boost from Yellen's comments. US stocks and prices for Treasury debt fell.
The economy's improving fortunes also were underscored by a report on Tuesday showing auto sales hit a seasonally adjusted annualised rate of 18.2 million vehicles in October, the best performance for that month since 2001.
That was reinforced by a third report on Wednesday from the Commerce Department showing the trade gap fell 15 per cent to $40.8 billion in September, the smallest deficit since February.
Lower crude oil prices also helped to curb the import bill.
The dollar has gained 16.8 per cent against the currencies of the United States' main trading partners since June 2014, undercutting export growth. Lackluster global demand also has put a damper on exports.
Exports in September rose 1.6 percent to $187.9 billion, with exports of services hitting a record high. There were increases in exports of capital goods and automobiles. Exports of industrial supplies and materials, however, were the lowest since October 2010.
Imports fell 1.8 per cent to $228.7 billion, the lowest level since February. They had received a boost in August from Apple's new iPhone model. Imports of industrial supplies and materials fell to near a six-year low.
The economic outlook was further brightened by another report on Wednesday showing the trade deficit hit a seven-month low in September as exports rebounded, a tentative sign the worst of the drag from the stronger dollar may be over.
Fed Chair Janet Yellen told lawmakers on Wednesday the US economy is "performing well" and a December rate hike could be justified.
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"You have a set of data thus far that tells the Fed that things are in good shape going into the fourth quarter and is giving them the green light to go," said Jacob Oubina, senior US economist at RBC Capital Markets in New York.
The ADP National Employment Report showed private payrolls increased 182,000 last month on top of the 190,000 jobs added in September. Job gains last month were broad-based, though manufacturing lost 2,000 positions.
The ADP report, which is jointly developed with Moody's Analytics, was released ahead of the Labor Department's more comprehensive employment report on Friday.
According to a Reuters survey of economists, nonfarm payrolls increased 180,000 in October, well above the average gain of 139,000 jobs for August and September.
Economists say the expected October job gains would be seen as sufficient for the Fed to raise its benchmark overnight interest rate from near zero at its December 15-16 policy meeting.
The unemployment rate is forecast to be steady at 5.1 per cent. In a separate report, the Institute for Supply Management said its non-manufacturing index rose to 59.1 last month from a reading of 56.9 in September. A reading above 50 indicates expansion in the sector, which accounts for more than two-thirds of the US economy.
A gauge of new orders received by services industries rose a sturdy 5.3 percentage points to 62 and employment increased to 59.2 per cent from a reading of 58.3 in September. Fourteen services industries reported growth last month. Only mining reported a contraction.
"It suggests that the service sector has hardly skipped a beat despite signs of weakness in other parts of the economy," said Millan Mulraine, deputy chief economist at TD Securities in New York. "The US economic recovery is off to a very strong start in the fourth quarter after the subpar performance in the third quarter."
The economy expanded at a 1.5 per cent annual rate in the July-September period, hurt by a slow pace of inventory accumulation and ongoing spending cuts by energy firms.
The dollar rose against a basket of currencies on Wednesday, getting an additional boost from Yellen's comments. US stocks and prices for Treasury debt fell.
The economy's improving fortunes also were underscored by a report on Tuesday showing auto sales hit a seasonally adjusted annualised rate of 18.2 million vehicles in October, the best performance for that month since 2001.
That was reinforced by a third report on Wednesday from the Commerce Department showing the trade gap fell 15 per cent to $40.8 billion in September, the smallest deficit since February.
Lower crude oil prices also helped to curb the import bill.
The dollar has gained 16.8 per cent against the currencies of the United States' main trading partners since June 2014, undercutting export growth. Lackluster global demand also has put a damper on exports.
Exports in September rose 1.6 percent to $187.9 billion, with exports of services hitting a record high. There were increases in exports of capital goods and automobiles. Exports of industrial supplies and materials, however, were the lowest since October 2010.
Imports fell 1.8 per cent to $228.7 billion, the lowest level since February. They had received a boost in August from Apple's new iPhone model. Imports of industrial supplies and materials fell to near a six-year low.