- Private-sector hiring rebounded in September after three months of slower growth, with education, health care and leisure leading the increase while financial and professional services shed jobs.
US private employers added 90,000 jobs in September, according to new data from Automatic Data Processing (NASDAQ: ADP), marking a rebound in hiring after a three-month slowdown. The increase was reported Wednesday by ADP’s September National Employment Report, which is produced by ADP Research in collaboration with Stanford Digital Economy Lab.
The report is based on anonymized payroll information covering more than 26 million private-sector employees. September's increase followed a revised gain of 36,000 jobs in August, up from the previously reported 38,000. ADP said hiring accelerated for the first time since May.
The result was stronger than the roughly 70,000 increase economists had expected, according to market estimates compiled ahead of the release. The report provides a fresh look at the US labor market ahead of the government's September employment report, scheduled for Friday, Oct. 2.
Healthcare And Hospitality Drive September Hiring
Education and health services accounted for the largest increase, adding 55,000 private-sector jobs during the month. Leisure and hospitality added another 22,000. Construction employment increased by 15,000, while manufacturing added 17,000 jobs. Information companies added 3,000, and other services gained 6,000. Trade, transportation and utilities were unchanged.
The gains were partly offset by declines in financial activities and professional and business services. Financial employers reduced payrolls by 16,000, while professional and business services shed 11,000 positions. Natural resources and mining also declined by 1,000 jobs.
The composition of hiring also differed by company size. Medium-sized businesses added 54,000 jobs, accounting for the largest increase among the three categories tracked by ADP. Small businesses added 23,000, while large employers added 14,000. The regional data showed the Northeast leading the country with a gain of 56,000 jobs. The West added 17,000, the South gained 11,000, and the Midwest added 5,000.
Pay growth remained positive but did not accelerate sharply. ADP said median base pay increased 3.2% from a year earlier in September. Workers who remained with the same employer saw base pay rise 3.0%, while job-changers recorded a 4.8% increase. Median gross pay increased 4.7% overall, with gross pay rising 4.4% for job-stayers and 7.3% for workers who changed jobs.
ADP Jobs Data Comes Before The Government Report
The September ADP report arrives as investors assess whether the US economy can maintain employment growth while inflation and interest-rate pressures remain elevated.
Recent US jobs data has shown a labor market that continues to expand but at a slower pace than during earlier periods of the economic recovery. The Labor Department's August report showed total nonfarm payrolls increased by 162,000, while average hourly earnings for private-sector workers rose 3.1% over the year.
The separate Job Openings and Labor Turnover Survey released Tuesday showed US job openings fell by 256,000 in August to 7.079 million, although layoffs remained relatively low. That combination makes the Friday employment report particularly important for assessing whether September's private-sector rebound extends to the broader economy.
The Bureau of Labor Statistics is scheduled to release the September Employment Situation on Oct. 2 at 8:30 a.m. ET. The report will include total nonfarm payrolls, unemployment, and wage data, covering both private and government employment.
ADP's figures are not a direct substitute for the government report. The ADP National Employment Report measures private-sector payroll employment using ADP payroll data, while the BLS Employment Situation uses separate surveys and includes government employment.
The latest ADP data nevertheless provides another indication of where hiring is occurring. September's gains were concentrated in education and health services, leisure and hospitality, and construction and manufacturing, while financial and professional services remained weaker.
For markets, the next major question is whether the government data confirms a similar improvement in hiring or shows a different pattern across the broader US economy.