US private sector sheds jobs in September, missing expectations: ADP
THE US private sector lost jobs in September, data from payroll firm ADP showed Wednesday (Oct 1), despite analysts’ expectations of employment growth and as concerns linger over the health of the labour market.
Private sector employment shed 32,000 jobs last month, said ADP, with the biggest losses seen in sectors like leisure and hospitality and professional services, as well as in financial activities.
Hiring in trade, transportation and utilities, as well as construction and manufacturing also contracted, data showed.
But analysts were swift to warn that ADP’s figures often diverge from official numbers.
They said this report could receive more scrutiny than usual as a US government shutdown – if it persists – might delay the publication of government employment numbers expected on Friday.
For now, ADP’s overall reduction came as it conducted an annual preliminary adjustment of figures based on 2024 results of the quarterly census of employment and wages.
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This resulted in a loss of 43,000 jobs in September compared with pre-benchmarked data, ADP added.
“Despite the strong economic growth we saw in the second quarter, this month’s release further validates what we’ve been seeing in the labor market, that US employers have been cautious with hiring,” said ADP chief economist Nela Richardson in a statement.
“Far from definitive”
Pantheon Macroeconomics’ senior US economist Oliver Allen maintains that Wednesday’s report is “far from definitive”.
He said in a note that other “more reliable surveys generally point to growth in private payrolls slowing only a bit further in September, and remaining positive”.
But Carl Weinberg, chief economist at High Frequency Economics, said markets would likely focus on how the headline number was below expectations.
A Briefing.com consensus forecast of analysts, for example, had expected private sector hiring growth of 40,000.
“Regardless of whether ADP is a good advance estimate of the official payroll estimate, or not, markets will perceive this as a weaker-than-expected report,” Weinberg said.
This could fuel expectations for further Federal Reserve rate cuts this year.
Weinberg believes that market perceptions could also quickly change if the Bureau of Labor Statistics did end up reporting official payroll numbers on Friday that are significantly different.
On Wednesday, ADP said that salaries were up 4.5 per cent year on year, a rate that was “little changed”.
Pay gains for those who changed jobs cooled to 6.6 per cent in September from 7.1 per cent in August, ADP added.
US policymakers have been wary of weakening in the key jobs market, with the central bank cutting interest rates for the first time in 2025 last month over employment concerns. AFP
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