The US private sector experienced a significant surge in job growth during September, with the addition of 90,000 jobs, according to a report by ADP. This growth rate exceeded the revised August figure of 36,000 jobs and surpassed the Dow Jones estimate of 68,000 jobs. The report highlighted a balanced growth across sectors, with service providers adding 59,000 jobs and goods-producing sectors contributing 31,000 jobs.
The growth in wages also showed a positive trend, with the basic pay increasing by 3.2% compared to the previous year. The overall wage growth accelerated to 4.7%. Nilla Richardson, chief economist at ADP, described the report as strong, stating that after a three-month slowdown, job creation regained momentum, and wage growth remained robust.
The education and healthcare sectors led the job growth, adding 55,000 new jobs. Other areas of growth included entertainment and hospitality with 22,000 jobs, manufacturing with 17,000 jobs, and construction with 15,000 jobs. However, some sectors experienced job losses, including financial activities with a loss of 16,000 jobs, professional and business services with 11,000 jobs, and natural resources and mining with 1,000 jobs.
The Northeast region witnessed significant job growth, adding 56,000 jobs. Companies with 50-499 employees showed a substantial increase of 54,000 jobs. The ADP report generally supports the view of many Federal Reserve officials that the labor market is in good shape, despite concerns about economic growth.
The strong job growth and wage increases may influence the Federal Reserve's decision-making on interest rates. Earlier in September, the Fed raised interest rates by a quarter of a percentage point, citing ongoing inflation as a concern. The ADP report serves as a precursor to the non-farm payroll report, which is set to be released on Friday.
Economists expect the non-farm payroll report to show an increase of 84,000 jobs, which is lower than the previous month's 162,000 jobs. The unemployment rate is expected to remain steady at 4.1%. The ADP report's findings align with the views of policymakers who see the labor market as a positive indicator for the economy.
The September job growth report provides a positive outlook for the US labor market, indicating resilience and stability. As the economy continues to navigate through challenges, the job market's performance will be closely watched by policymakers and economists alike. The upcoming non-farm payroll report will provide further insights into the labor market's health and potentially influence future economic policies.
Key points
- US private sector job growth accelerated in September, adding 90,000 jobs.
- The education and healthcare sectors led job growth, adding 55,000 new jobs.
- The Northeast region witnessed significant job growth, adding 56,000 jobs.
