US private sector adds fewer jobs in September but beats views

Private sector employment in the US rose more than expected in September, according to data released by ADP on Wednesday.

Employers added 135,000 jobs versus expectations of a 125,000 increase. Still, this was slower growth than the 228,000 increase in August, which was revised from a previously reported 237,000 gain.

Small businesses with fewer than 50 employees lost 7,000 positions, while medium businesses with between 50 and 499 employees added 63,000 jobs. Large companies with 500 or more employees added 79,000 jobs.

The goods-producing sector recruited an extra 48,000 people, while service providers added 88,000 jobs.

Mark Zandi, chief economist at Moody’s Analytics, said: "Hurricanes Harvey and Irma hurt the job market in September. Looking through the storms the job market remains sturdy and strong."

Pantheon Macroeconomics said: "Without the hurricanes, we reckon ADP's number would have been about 175K, so the hit from the storms appears modest. But remember that the ADP number is generated from a model which relies heavily on lagged official data - they're coy about this in the press release, but it's all in the tech notes - so the September number is supported by the August rise in payrolls.

"The official September number, though, will be based only on evidence collected in the survey of employers, and it likely will undershoot ADP. That's what usually happens when payrolls are hit by one-time events like hurricanes, blizzards or strikes, and this time probably will be no different. We're sticking to our 75K forecast for the official number on Friday, but we then expect a rebound in October."