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Private payrolls increased by 568,000 jobs last month, the ADP
National Employment Report showed on Wednesday. Data for August
was revised lower to show 340,000 jobs added instead of the
initially reported 374,000. Economists polled by Reuters had
forecast private payrolls would increase by 428,000 jobs.
"Stronger job growth in September could indicate that the drag
on hiring from the recent increase in coronavirus cases is
fading," said Gus Faucher, chief economist at PNC Financial in
Pittsburgh, Pennsylvania.Employment gains averaged 410,000 jobs
in the third quarter, a slowdown compared to the second-quarter
average of 748,000. Last month, the leisure and hospitality
industry added 226,000 jobs after creating 155,000 positions in
August.
Manufacturing payrolls increased by 49,000 jobs, while hiring at
construction sites also rose by 49,000. Job gains in other
sector were modest. Large firms accounted for the bulk of job
creation last month, followed by medium-sized companies. Small
business hiring climbed by 63,000 after rising 61,000 in August.
The ADP report is jointly developed with Moody's Analytics and
was published ahead of the Labor Department's more comprehensive
and closely watched employment report for September on Friday.
Though it flagged the sharp slowdown in job growth in August, it
largely has a poor record predicting the private payrolls count
in the department's Bureau of Labor Statistics (BLS) employment
report because of methodology differences.
"Today's number broadly supports our view that the labor market
is continuing to recover and that job growth picked up in
September relative to August, but the ADP report has not been a
very reliable predictor of the BLS data," said Daniel Silver, an
economist at JPMorgan in New York.
Attention now shifts to September's government employment
report, which will be crucial for the Federal Reserve after the
U.S. central bank signaled last month that it would likely begin
reducing its monthly bond purchases as soon as November.
Economists say the bar is low after Fed Chair Jerome Powell,
said last month that the economy was one "decent" monthly
employment report short of meeting the threshold for tapering
its massive bond buying program.
According to a Reuters survey of economists, nonfarm payrolls
likely increased by 473,000 jobs in September. The economy
created 235,000 jobs in August, the fewest in seven months. The
unemployment rate is forecast dipping to 5.1% from 5.2% in
August.
"It looks like the gain in employment will qualify as 'decent',"
said Paul Ashworth, chief economist at Capital Economics in
Toronto.
But labor market indicators were mixed in September. A survey
from the Conference Board last week showed consumers' views of
current labor market conditions softened.
The number of people on state unemployment rolls fell in
mid-September relative to mid-August. The Institute for Supply
Management's measure of manufacturing employment rebounded last
month after contracting in August. But the ISM's gauge of
services industry employment slipped, with businesses reporting
that "labor shortages (were) experienced at all levels."
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and
Andrea Ricci)
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