Private sector employment drops by 32,000 in September, falling short of expectations
Reflects adjustments to Department of Labor statistics
Private sector employment in the United States saw a significant and unexpected decline last month. In addition, the employment figures for August were sharply revised downward.
According to an employment report released on October 1 (local time) by ADP, a U.S. private labor market research firm, the number of new jobs in the private sector in September decreased by 32,000 compared to the previous month.
This marks the largest decline in two and a half years since March 2023, when there was a decrease of 53,000 jobs. It also stands in stark contrast to the market forecast, which had anticipated an increase of 45,000 jobs.
The new employment figure for August was also sharply revised, from a previously reported increase of 54,000 jobs to a decrease of 3,000 jobs.
ADP explained that the September figures were adjusted downward to reflect the revised employment statistics released last month by the Bureau of Labor Statistics (BLS) under the Department of Labor. This means that without these adjustments, private sector employment in September might not have shown a decline.
By industry, the leisure and hospitality sector saw a decrease of 19,000 jobs. Other services lost 16,000 jobs, professional and business services fell by 13,000, trade, transportation, and utilities declined by 7,000, construction dropped by 5,000, and manufacturing decreased by 2,000. In contrast, education and health services added 33,000 jobs, while the natural resources and mining sector and the information sector increased by 4,000 and 3,000 jobs, respectively.
The wage growth rate showed a decline among job changers. For workers who remained at their jobs for more than one year, wages rose by 4.5% year-over-year, maintaining a similar level to the previous month (4.4%). However, the wage growth rate for job changers fell from 7.1% in August to 6.6% in September.
Nela Richardson, Chief Economist at ADP, commented, "Despite strong economic growth in the second quarter, this report reaffirms what we have continued to observe in the U.S. labor market," adding, "U.S. employers are showing caution when it comes to hiring."
Wall Street is closely watching the impact of President Donald Trump's tariff policies on employment, prices, and the broader U.S. economy. Amid these developments, there is growing analysis that signs of a slowdown in the labor market are gradually accumulating.
Meanwhile, this ADP employment report was released as the federal government shutdown (temporary work stoppage) became a reality on this day. With the BLS suspending operations due to the shutdown, the official September employment report scheduled for October 3 will also be canceled. As this report had been considered a key factor in the Federal Reserve's October interest rate decision, a prolonged shutdown would leave the Fed having to decide on the benchmark interest rate on October 29 without access to major indicators.
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