The private sector in the United States experienced a notable acceleration in employment growth during September, as reported by Automatic Data Processing. According to ADP’s data, private employment surged by 143,000 jobs last month, exceeding the anticipated increase of 125,000 jobs based on a survey by Bloomberg.
Furthermore, the job gains for August were revised upward from 99,000 to 103,000, indicating a more robust labor market than previously understood. In terms of wage growth, there was a slight deceleration year-over-year, with wages for job stayers growing by 4.7%, while wages for those changing jobs dropped from a growth of 7.3% in August to 6.6% in September.
Nela Richardson, the Chief Economist at ADP, commented on this trend, stating, "Stronger hiring didn't require stronger pay growth last month." She pointed out that typically, workers who change jobs tend to enjoy a faster growth rate in pay; however, the premium for job changers over job stayers has diminished to 1.9%, a figure that matches a low not seen since January. The goods-producing sector was a significant contributor to the job growth last month, adding 42,000 jobs primarily driven by the construction industry.
On the other hand, service-related sectors accounted for 101,000 new jobs, with leisure and hospitality leading the charge with an addition of 34,000 jobs. Subsequently, education and health services also saw an increase of 24,000 jobs, while professional and business services contributed an addition of 20,000 jobs.
Conversely, the information services sector was the only industry that reported a decline in employment figures, according to the report. TS Lombard provided a cautionary note regarding the interpretation of the monthly ADP report, suggesting that while it exceeded expectations, it raises concerns about the forthcoming Bureau of Labor Statistics (BLS) numbers.
Their note indicated, "One should never put too much into the monthly ADP report. That it came in above expectations raises the probability that the Bureau of Labor Statistics numbers on Friday will fall short." The BLS is anticipated to reveal that the US economy added 150,000 nonfarm jobs in September, marking an improvement compared to the 142,000 gain recorded for the previous month, based on another Bloomberg survey.
Additional government reports released on Tuesday indicated an increase in US job openings in August, while the rates of quits and layoffs cooled, adding another layer to the employment landscape..