A sign reading “Join Our Team” is displayed at the New York Public Library’s annual Bronx Career Fair and Expo at the Bronx Library Center in the Bronx, New York, U.S., Friday, Sept. 6, 2024.
Yuki Iwamura | Bloomberg | Getty Images
Payroll processing company ADP reported on Wednesday that private sector hiring increased in September, a sign that the labor market is holding on despite some signs of weakness.
Businesses added 143,000 jobs this month, up from an upwardly revised 103,000 jobs in August and better than the 128,000 consensus forecast among economists surveyed by Dow Jones.
While recruiting has increased, salary growth has dropped another step. The 12-month gain for those who stayed in the job fell slightly to 4.7%, while the 12-month gain for those who switched jobs fell to 6.6%, down 0.7 percentage points from August.
Employment growth was broad-based, with the leisure and hospitality industry accounting for the largest number of jobs at 34,000, followed by construction (26,000), education and health services (24,000), professional and business services (20,000), and other services (20,000). 17,000).
Information services was the only category to post a loss, with a decrease of 10,000 people.
Service providers accounted for 101,000 of the total, with the remainder being goods producers.
In terms of size, all growth came from companies with more than 50 employees. Small businesses suffered losses, with those employing fewer than 20 workers losing 13,000 people.
The ADP data comes two days ahead of the Labor Department’s nonfarm payrolls report, which is expected to show a gain of 150,000 jobs after a disappointing 142,000 jobs in August, including 118,000 from private sector hiring.
While ADP reports are a precursor to official statistics, the two can differ, sometimes significantly.
Federal Reserve officials are keeping a close eye on the jobs data as they consider next steps for monetary policy and interest rates. In a speech on Monday, Federal Reserve Chairman Jerome Powell described the labor market as “solid” while noting that it had “cooled significantly” over the past year.
The Fed is expected to cut interest rates further in November and December after cutting interest rates by half a percentage point in September. The main question is whether the central bank will move as sharply or return to more traditional quarter-point action.
The current futures market pricing is expected to be reduced by 25 basis points in November and half a basis point in December. Powell said that while policymakers are still watching the data and will adjust accordingly, consecutive quarter-percentage moves are now more likely.
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