A recent National Employment report published by ADP revealed that job growth in September experienced a significant decline, marking a stark contrast to other indicators that point to a more robust labor market.
As reported by CNBC, the data from the payroll processing firm showed that job growth for the month of September was at a mere 89,000 — a significant drop from the revised 180,000 in August. This figure also fell short of the 160,000 estimate that many economists predicted.
This slowdown in job growth might point towards a shift in the historically tight labor market. Such a trend could influence the Federal Reserve’s decisions, possibly providing an incentive to halt the rise in interest rates. Another noteworthy observation from ADP’s report is the continuous decline in annual wage growth, which has now reached its 12th consecutive month, standing at 5.9%.
However, it’s important to note that ADP’s figures can sometimes vary from the government’s official count. For instance, economists predict that nonfarm payrolls for September increased by 170,000, a slight decrease from August’s 187,000.
A deeper dive into the report reveals that the majority of job gains came from the services sector, contributing 81,000 to the total. Within this, the leisure and hospitality sector stood out, adding 92,000 jobs. Other sectors, such as financial activities, construction, and education and health services, also experienced gains. However, these were counterbalanced by losses in professional and business services, trade, transportation, utilities, and manufacturing.
This report’s release closely followed the Labor Department’s announcement of a surprising rise in job openings in August.
According to CNBC, smaller companies — those with fewer than 50 employees — saw the most robust job growth, adding 95,000 positions. Meanwhile, larger corporations — those with 500 or more employees — witnessed a loss of 83,000 jobs.