NEW YORK, NY — Private employers added 90,000 jobs in September, a stronger showing than economists expected and a notable pickup from August, according to ADP’s latest private payrolls estimate released Wednesday.
The gain topped the 70,000 increase forecast by economists and followed a revised 36,000-job rise the previous month. ADP chief economist Nela Richardson called it “a strong report,” saying hiring rebounded after a three-month slowdown and that pay growth remained solid.
The figures offered an early look at labor market momentum before the Labor Department’s more closely watched monthly employment report.
Education, health care and leisure drove the month’s job gains
Education and health services led all industries in September with 55,000 new positions. Leisure and hospitality added 22,000 jobs, while manufacturing contributed 17,000.
Construction increased by 15,000 positions, and other services added 6,000. Information employment rose by 3,000. Those gains helped offset flat hiring in trade, transportation and utilities.
The sector mix showed broad but uneven strength, with some of the largest service categories carrying most of the month’s improvement. ADP’s monthly breakdown pointed to continued demand in health care and consumer-facing industries even as other parts of the economy softened.
Financial and business services lost jobs as some industries cooled
Not every part of the private sector shared in the September increase. Financial activities lost 16,000 jobs, and professional and business services shed 11,000 positions.
Natural resources and mining also slipped, with employment down by 1,000. Those losses pulled against the gains in education, health services and leisure, underscoring a labor market that remains active but uneven across industries.
ADP’s figures suggested that hiring conditions are still changing from one sector to another, even as overall payroll growth returned to positive territory after weaker summer months.
Large employers posted the biggest increase in ADP’s breakdown
By company size, businesses with 500 or more employees added 34,000 jobs in September. Firms with 50 to 499 employees gained 54,000, while establishments with fewer than 50 employees added 23,000.
The split indicated that midsize employers were the largest contributors to the month’s gain, though large companies also showed meaningful hiring. Smaller firms continued to expand as well, though at a slower pace than mid-sized businesses.
ADP’s size categories are closely watched because they can help show where labor demand is strongest across the private economy. In September, the broad advance suggested that hiring was not limited to just one segment of business.
Pay growth stayed positive even as hiring slowed earlier in the year
ADP said base pay increased 3.2% from a year earlier, while gross pay rose 4.7%. Richardson said compensation growth remained solid, even as the job market had gone through a period of slower hiring.
The pay data gave the report an added dimension beyond the headline employment number. Employers are still increasing wages, a sign that competition for workers has not disappeared even as pace of hiring has been uneven.
For workers and employers alike, the combination of better job creation and continued wage growth suggested a labor market that is cooling from earlier highs but still holding up better than many forecasters had feared.
Friday's Labor Department report could confirm or complicate the picture
ADP’s monthly estimate comes ahead of the Labor Department’s nonfarm payrolls report, due Friday morning. The two reports can differ significantly, so Wednesday’s number is not expected to match the government’s final reading exactly.
Economists expect the Labor Department to report a gain of 84,000 jobs, which would be below the unexpected loss of 23,000 jobs reported in July. The unemployment rate is expected to stay at 4.1%.
The upcoming government release will help show whether September’s private-sector rebound is part of a broader labor-market improvement or just a monthly swing in the ADP data.