Private sector hiring in September showed an increase, as reported by payrolls processing firm ADP on Wednesday, suggesting that the labor market remains stable despite some weaknesses.
In September, companies added 143,000 jobs, which was higher than the upwardly revised 103,000 jobs in August and exceeded the economists’ consensus forecast of 128,000 jobs.
Although hiring improved, the rate of wage growth declined. The 12-month wage gain for employees staying in their current positions decreased to 4.7%, while it fell to 6.6% for job switchers, down by 0.7 percentage points from August.
Job gains were observed across various sectors, with leisure and hospitality leading at 34,000 jobs, followed by construction (26,000), education and health services (24,000), professional and business services (20,000), and other services (17,000). The information services sector was the only one to experience a loss, down by 10,000 jobs.
Service providers contributed 101,000 jobs to the total, while goods producers added the remaining jobs. Growth was seen in companies with more than 50 employees, while small firms with fewer than 20 workers experienced a loss of 13,000 jobs.
The ADP report precedes the Labor Department’s nonfarm payrolls report by two days, which is anticipated to show a growth of 150,000 jobs, following August’s disappointing figure of 142,000, with 118,000 from private sector hiring.
Federal Reserve officials are closely monitoring the job numbers as they consider the next steps for monetary policy and interest rates. Fed Chair Jerome Powell described the labor market as “solid” in a speech on Monday, acknowledging that it has cooled over the past year.
The Fed is expected to continue reducing rates following the half percentage point cut in September, with further reductions anticipated in November and December. The question remains whether the central bank will opt for a large cut or return to a more conventional quarter-point move. Current futures market pricing suggests a quarter-point cut in November followed by a half-point cut in December. Powell indicated that consecutive quarter-point moves are more likely, with policymakers ready to adjust based on incoming data.
