US companies added 208,000 jobs in September, beating expectations: ADP
Economists expected private payrolls to grow by 200,000 in September
Will the U.S. economy remain resilient as the Fed tightens policy?
Infrastructure Capital Advisors CEO Jay Hatfield and Michael Lee Strategist founder Michael Lee preview a big week of economic data.
Private payroll job growth rose faster than expected in September, suggesting that companies are continuing to hire new workers despite growing fears of an economic slowdown, according to the ADP National Employment Report released Wednesday morning.
Companies added 208,000 jobs last month, beating the 200,000 gain that economists surveyed by Refinitiv had predicted and topping the revised August gain of 185,000. Still, while job growth remains stable, it is well below the three-month average, ADP said in the report.
"There are signs that people are returning to the labor market," said Nela Richardson, chief economist at ADP. "We're in an interim period where we're going to continue to see steady job gains. Employer demand remains robust and the supply of workers is improving – for now."
The hiring increase came even as goods-producing industries reported a loss of 29,000 jobs. The natural resources and mining sector shed 16,000 jobs last month, while manufacturing payrolls fell by about 13,000.
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Bay Shore, N.Y.: A large "Now Hiring" advertisement posted on the windows of the Advance Auto Parts store in Bay Shore, New York on March 24, 2022. ((Photo by Steve Pfost/Newsday RM via Getty Images) / Getty Images)
Service-providing industries, meanwhile, saw payrolls jump by 237,000 in September, with the largest increases in trade, transportation and utilities (147,000), professional and business services (57,000), education and health services (38,000) and leisure and hospitality (31,000). The information sector, however, lost 19,000 jobs, while financial activities declined by 16,000.
By size, hiring accelerated at all businesses: Medium businesses that employ between 50-499 workers saw a gain of 90,000, while large firms added 60,000. Small businesses, which have struggled the most with the worst inflation in four decades, onboarded 58,000 new workers.
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The red-hot labor market saw another month of significant pay increases, according to the report, which is now conducted alongside Stanford Digital Economy Lab. Wages climbed 7.8% in September, up slightly from August – a concerning development as consumers continue to confront high inflation.
A Now Hiring sign is displayed in front of a restaurant in Rehoboth Beach, Delaware, on March 19, 2022. ((Photo by STEFANI REYNOLDS/AFP via Getty Images) / Getty Images)
However, those changing jobs lost momentum in September, with wages rising 15.7%, down from a 16.2% gain recorded in August.
The Fed has responded to the inflation crisis and the extremely tight labor market by raising interest rates at the fastest pace in decades. Officials approved three consecutive 75-basis-point rate hikes in June, July and September, and have signaled that another of that magnitude is on the table in November.
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The data precedes the release of the September jobs report on Friday morning, which is expected to show that employers hired 250,000 workers following a gain of 315,000 in July. The unemployment rate is expected to hold steady at 3.7%.