Private sector adds 135,000 jobs in September, spurring fears of economic slowdown
Private employers in the U.S. added 135,000 jobs in September, according to the latest ADP National Employment Report, slightly missing analyst expectations of 140,000 amid signs the labor market is beginning to cool.
"Job growth is definitively slowing," said Mark Zandi, chief economist of Moody's Analytics, during a conference call with reporters.
Most hiring took place in the service-providing sector, with 127,000 new jobs created. Manufacturing hiring, however, slipped, with a mere 2,000 jobs added.
"Businesses have turned more cautious in their hiring," Zandi said. "Small businesses have become especially hesitant. If businesses pull back any further, unemployment will begin to rise."
Over the past three months, average private-sector hiring has been 145,000 -- down from 214,000 in the year-ago period. Although that number is currently consistent enough to maintain stable employment, Zandi warned that if job growth continues to slow, unemployment will likely rise.
When unemployment rises, even slightly, it tends to trigger a change in the business cycle from expansion to recession, Zandi said.
"We are at a very critical juncture," he said.
Plus, the decline in job growth comes on the heels of the lowest U.S. manufacturing reading in more than 10 years. The Institute for Supply Management's purchasing managers' index fell to 47.8 percent in September, the lowest level since the financial crisis. Any figure below 50 percent signals a contraction.
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The report precedes the release of the more closely watched Labor Department’s jobs report on Friday, during which the U.S. economy is expected to have added 150,000 new jobs. Analysts anticipate unemployment will remain at 3.7 percent, near a decades-low. In August, the U.S. added a weaker-than-expected 130,000 new positions.