| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Private Payrolls - M/M | 150,000 | 102,000 to 190,000 | 89,000 | 177,000 | 180,000 |
Highlights
The ADP national employment report for September shows an increase of 89,000 in private payrolls after a small upward revision to up 180,000 in August. The rise is below the consensus of up 150,000 in the Econoday survey of forecasters. The change in employment reflects increases of 8,000 for goods-producing industries and 81,000 for service-providers' payrolls.
Among goods-producers in September, payrolls are up 16,000 for construction and 4,000 for natural resources/mining, while manufacturing payrolls are down 12,000. Service-providers' have a mixed performance with a solid increase of 92,000 in leisure/hospitality and smaller rises of 17,000 in financial activities, 10,000 in education/health services, 6,000 in other services, and 1,000 in information. There is offset to this from decreases of 32,000 in professional/business services and 13,000 in trade/transportation/utilities.
Increases in payrolls in September are concentrated in gains of 95,000 for small establishments (1-49 workers) and 72,000 in medium establishments (50-499 workers). Large establishments (500+ workers) are down 83,000 jobs.
The median increase in annual pay for job-stayers trends lower for the 12th month in a row at 5.9 percent in September, to the lowest since 5.6 percent in September 2021. Those who changed jobs see a 9.0 percent year-over-year increase in pay in September, the lowest since 8.1 percent in June 2021. While wages continue to rise above the rate of inflation, upward wage pressures are abating.
Among goods-producers in September, payrolls are up 16,000 for construction and 4,000 for natural resources/mining, while manufacturing payrolls are down 12,000. Service-providers' have a mixed performance with a solid increase of 92,000 in leisure/hospitality and smaller rises of 17,000 in financial activities, 10,000 in education/health services, 6,000 in other services, and 1,000 in information. There is offset to this from decreases of 32,000 in professional/business services and 13,000 in trade/transportation/utilities.
Increases in payrolls in September are concentrated in gains of 95,000 for small establishments (1-49 workers) and 72,000 in medium establishments (50-499 workers). Large establishments (500+ workers) are down 83,000 jobs.
The median increase in annual pay for job-stayers trends lower for the 12th month in a row at 5.9 percent in September, to the lowest since 5.6 percent in September 2021. Those who changed jobs see a 9.0 percent year-over-year increase in pay in September, the lowest since 8.1 percent in June 2021. While wages continue to rise above the rate of inflation, upward wage pressures are abating.
Market Consensus Before Announcement
Forecaster see ADP's September employment number at 150,000. This would compare with August growth in private payrolls reported by the Bureau of Labor Statistics of 179,000. ADP's number for August was 177,000.
Definition
The national employment report from Automated Data Processing Inc. is computed from ADP payroll data and offers advance indications on the U.S. workforce. ADP's data cover more than 500,000 companies totaling more than 25 million employees. The report is produced by ADP Research Institute in collaboration with Stanford Digital Economy Lab.
Description
Market players have become accustomed to the excitement on employment Friday and realize the rich detail of the monthly employment situation can help set the tone for the entire month. While economists have improved their nonfarm payroll forecasts over the years, it is not unusual to see surprises on employment Friday. To that end, the ADP's national employment report can help improve the payroll forecast by providing information in advance of the employment report.
The employment statistics also provide insight on wage trends, and wage inflation is high on the list of enemies for the Federal Reserve. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.
By tracking jobs, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.
The employment statistics also provide insight on wage trends, and wage inflation is high on the list of enemies for the Federal Reserve. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.
By tracking jobs, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.
