[1/2]People line up outside a newly reopened career center for in-person appointments in Louisville, U.S., April 15, 2021. REUTERS/Amira Karaoud/File Photo Acquire Licensing Rights
WASHINGTON, Oct 4 (Reuters) – U.S. private employers added the fewest workers in more than 2-1/2 years in September, with large establishments shedding jobs, but that likely exaggerates the pace of slowdown in the labor market.
Private payrolls rose by 89,000 jobs last month, the smallest gain since January 2021, the ADP National Employment Report showed on Wednesday. Economists polled by Reuters had forecast private employment would rise by 153,000. Data for August was revised slightly higher to show 180,000 jobs added instead of the previously reported 177,000.
The report also showed wages for job changers increasing 9% year-on-year in September, slowing from 9.7% in August.
“We are seeing a steepening decline in jobs this month,” said Nela Richardson, chief economist at ADP. “Additionally, we are seeing a steady decline in wages in the past 12 months.”
The slowdown was driven by large corporations, which purged 83,000 jobs. Small businesses added 95,000 positions, while medium-sized enterprises’ payrolls increased by 72,000.
Manufacturing lost 12,000 jobs, while the trade, transportation and utilities sector shed 13,000 positions. Employment in the professional and business services industry decreased by 32,000 positions. There were notable job gains in construction, financial activities as well as education and health services industries.
The labor market is gradually easing as it adjusts to 525 basis points worth of interest rate increases from the Federal Reserve since March 2022. The government reported on Tuesday that there were 1.51 job openings for every unemployed person in August, though unfilled positions increased by the most in two years. A survey from the Conference Board last week showed consumers’ views of the labor market had improved in September.
The ADP report, jointly developed with the Stanford Digital Economy Lab, was published ahead of the release on Friday of the Labor Department’s Bureau of Labor Statistics’ more comprehensive and closely watched employment report for September. It has not been a reliable gauge in trying to predict the private payrolls count in the BLS’ employment report.
“Leaving aside the loose relationship between the ADP and BLS data, the ADP figures do show a moderating trend for job growth in recent months, which we think is very roughly consistent with what should be going on in the labor market,” said Daniel Silver, an economist at JPMorgan in New York.
According to a Reuters survey of economists, the Bureau of Labor Statistics is expected to report that private payrolls increased by 160,000 jobs in September. Including government employment, total nonfarm payrolls are forecast to have risen by 170,000 jobs last month after increasing by 187,000 in August.
Reporting by Lucia Mutikani; Editing by Paul Simao and Andrea Ricci
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