In a surprising turn for the job market, U.S. companies ramped up hiring in September for the first time in six months, reflecting continuing strength in the labor market despite signs of a broader economic slowdown.Â
Private sector payrolls increased by 143,000 in September, following an August rise that marked the slowest expansion since March 2023, according to data by the ADP Research Institute in collaboration with Stanford Digital Economy Lab.
This figure surpasses the Bloomberg economists’ forecast, which anticipated a gain of 125,000 jobs, according to Bloomberg. However, while the hiring pace improved, average wage growth showed signs of deceleration.Â
Employees who switched jobs in September saw their salaries increase by an average of 6.6% compared to the previous year — marking the smallest gain since early 2021. Meanwhile, workers who remained with their employers received an average raise of 4.7%.
Broader indicators suggest the labor market’s momentum may be fading. Despite September’s hiring uptick, the three-month average payroll growth fell to a modest 119,000, one of the lowest rates since 2020. Concurrently, recent months have seen a steady rise in the unemployment rate, with the September figure expected to hover at 4.2%.
In response to these economic conditions, the Federal Reserve reduced interest rates in September more aggressively than usual to mitigate potential economic softening. As the nation awaits the official government jobs report on Friday, these trends underscore a complex economic stage characterized by mixed signals of job growth resilience and slackening wage pressures.
