Private Sector Sees Uptick in Hiring, Despite Slowing Wage Growth
The labor market showed resilience in September, with private sector hiring picking up pace, according to a report by payrolls processing firm ADP. The data revealed that companies added 143,000 jobs during the month, exceeding the 128,000 forecast by economists and marking an acceleration from the revised 103,000 jobs added in August.
While hiring increased, wage growth slowed down, with the 12-month gain for employees staying in their jobs dipping to 4.7%. Job switchers saw a more significant decline, with their 12-month gain falling to 6.6%, a 0.7 percentage point drop from August.
The job gains were widespread, with leisure and hospitality leading the way, adding 34,000 positions. Construction, education and health services, professional and business services, and other services also saw significant gains. Information services was the only category to post a loss, shedding 10,000 jobs.
Service providers accounted for the majority of the job growth, with 101,000 positions added, while goods producers added the remaining jobs. Companies with more than 50 employees drove the growth, with small firms experiencing a decline, particularly those with fewer than 20 workers, which lost 13,000 jobs.
The ADP report precedes the Labor Department’s nonfarm payrolls report, which is expected to show growth of 150,000 jobs. Federal Reserve officials are closely monitoring the jobs data as they consider their next move on monetary policy and interest rates. The Fed is expected to cut rates further in November and December, with the question being whether they will opt for a quarter-point or half-point move.
In a recent speech, Fed Chair Jerome Powell described the labor market as “solid” but noted that it has “clearly cooled” over the past year. The Fed will continue to watch the data closely and adjust its policy accordingly.
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