US private sector adds fewer jobs than expected in September - ADP
Private sector employment in the US rose a little less than expected in September, according to the latest figures from ADP.
Employers added 135,000 jobs last month, missing expectations for a 140,000 increase. Meanwhile, the previous month’s gain was revised down to 157,000 from 195,000.
Small businesses with fewer than 50 employees added 30,000 jobs, while medium-sized businesses with between 50 and 499 members of staff added 39,000 jobs and large businesses of 500 employees or more created 67,000 jobs.
The goods-producing sector added 8,000 jobs to the economy, while the services sector created an additional 127,000 jobs, with education/health services contributing the largest chunk at 42,000.
Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said: "The job market has shown signs of a slowdown. The average monthly job growth for the past three months is 145,000, down from 214,000 for the same time period last year."
Mark Zandi, chief economist of Moody’s Analytics, said: "Businesses have turned more cautious in their hiring. Small businesses have become especially hesitant. If businesses pull back any further, unemployment will begin to rise."
Pantheon Macroeconomics said the trend is slowing, but September payrolls are likely to be better than August’s.
"This is not as soft as it appears, because ADP’s number is generated by a model which incorporates official payroll data from the previous month. Private payrolls were reported up only 96K in August, and that reading has constrained the September ADP. It’s not possible to know by how much, because ADP won’t release their raw data or the full model, probably because that would reveal that their number is mostly model-driven, with a relatively small contribution from data collected from firms which use ADP’s payroll processing services.
"Either way, the September number is marginally better than we expected but not enough to justify changing our 150K forecast for Friday. This would be an improvement from August but it would not change the trend, which is slowing. The downshift in labor demand in all the surveys we follow suggest job gains will be down to just 50-to-75K by the turn of next year.
"Finally, note that the August ADP reading was revised down to 157K from the initial 195K, because ADP back-fits its data to the official payroll numbers. This has no implications for the revisions to the official data, which will be published Friday."