Zincwarrior
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Private payrolls had their biggest slide since 2023, prior to the government shutdown. Expectations had been for an increase. August payrolls were also heavily revised down to nothing.
Private payrolls declined in September by 32,000 in key ADP report coming amid shutdown data blackout
Key Points
- Private companies shed a seasonally adjusted 32,000 jobs during the month, the biggest slide since March 2023.
- The report comes as the funding impasse in Washington, D.C. has led to the first government closure since late 2018 into early 2019.
- ADP’s count takes on added significance as markets widely expect the central bank to cut another quarter points off its key borrowing rate.
Private payrolls saw their biggest decline in two-and-a-half years during September, a further sign of labor market weakening that compounds the data blackout accompanying the U.S. government shutdown.
Companies shed a seasonally adjusted 32,000 jobs during the month, the biggest slide since March 2023, payrolls processing firm ADP reported Wednesday. Economists surveyed by Dow Jones had been looking for an increase of 45,000.
In addition to the drop in September, the August payrolls number was revised to a loss of 3,000 from an initially reported increase of 54,000.
The report comes as the funding impasse in Washington, D.C. has led to the first government closure since late 2018 into early 2019. Failing a deal over the next two days, the Bureau of Labor Statistics’ nonfarm payrolls report for September will not be released, nor will the Labor Department put out the weekly jobless claims count on Thursday. The last time the BLS payrolls report was delayed was in 2013.
Federal Reserve officials count on the payrolls releases as they make decisions on interest rates. The Fed next meets Oct. 28-29, meaning there won’t be another payrolls report before then.
ADP’s count, then, takes on added significance as markets widely expect the central bank to cut another quarter points off its key borrowing rate.
Job losses spread across sectors during September, offset by a 33,000 increase in education and health services as schools reopened and health care continued its long streak of hiring.
Elsewhere, leisure and hospitality, a key sector for consumer demand, saw a loss of 19,000 as vacation season wound down. The other services category posted a drop of 16,000, while professional and business services was off 13,000, trade, transportation and utilities declined by 7,000 and construction lost 5,000.
On a broad scale, service providers decreased 28,000 and goods producers shed 3,000. Businesses with fewer than 50 employees lost 40,000, while companies with 500 or more employees added 33,000.
“Despite the strong economic growth we saw in the second quarter, this month’s release further validates
what we’ve been seeing in the labor market, that U.S. employers have been cautious with hiring,” ADP chief economist Nela Richardson said.
