| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Private Payrolls - M/M | 121,500 | 80,000 to 140,000 | 143,000 | 99,000 | 103,000 |
Highlights
The ADP national employment report shows jobs up 143,000 in September after an upward revision to up 103,000 in August. The September level is about the consensus of 121,500 in the Econoday survey of forecasters. There was growth in all industry sectors except one.
Among sectors, goods-producers' payrolls are up 42,000 with hiring of 26,000 in construction, 14,000 in mining, and 2,000 in manufacturing. Despite weakness in homebuying, construction continues to see strong demand for workers as current homeowners repair and upgrade their properties.
Service-providers' payrolls are up 101,000 in September. With modest gains across the board except for a 10,000 decline in information. Many technology companies continue to restructure now that AI has become a common tool and eliminated the need for people to do some aspects of tech work. However, tech workers often are contract workers, or become so after layoffs, and remain active contributors to the economy.
Smaller firms are paring payrolls or eliminating open slots in September. The change in payrolls for small establishments (1-49 workers) is down 8,000, and concentrated in the smallest firms (1-19 workers) which had a 13,000 decline in payrolls. Medium-sized firms (50-499 workers) added 64,000 jobs in September and large establishments (500-plus workers) added 86,000 jobs.
ADP's pay insights shows the median annual change in income for job-stayers is 4.7 percent in September after 4.8 percent in August and 5.9 percent in September 2023. For job-changers, the median annual incre4ase is 6.6 percent in September, a sharp decline from 7.3 percent in August and 8.8 percent in September. Churn in the labor market is less as those who currently hold jobs are less likely to seek new employment while the economic outlook is uncertain. Businesses are no longer seeing as much competition for workers with the right skills and experience, but the need for more generous compensation for workers who meet requirements remains.
Among sectors, goods-producers' payrolls are up 42,000 with hiring of 26,000 in construction, 14,000 in mining, and 2,000 in manufacturing. Despite weakness in homebuying, construction continues to see strong demand for workers as current homeowners repair and upgrade their properties.
Service-providers' payrolls are up 101,000 in September. With modest gains across the board except for a 10,000 decline in information. Many technology companies continue to restructure now that AI has become a common tool and eliminated the need for people to do some aspects of tech work. However, tech workers often are contract workers, or become so after layoffs, and remain active contributors to the economy.
Smaller firms are paring payrolls or eliminating open slots in September. The change in payrolls for small establishments (1-49 workers) is down 8,000, and concentrated in the smallest firms (1-19 workers) which had a 13,000 decline in payrolls. Medium-sized firms (50-499 workers) added 64,000 jobs in September and large establishments (500-plus workers) added 86,000 jobs.
ADP's pay insights shows the median annual change in income for job-stayers is 4.7 percent in September after 4.8 percent in August and 5.9 percent in September 2023. For job-changers, the median annual incre4ase is 6.6 percent in September, a sharp decline from 7.3 percent in August and 8.8 percent in September. Churn in the labor market is less as those who currently hold jobs are less likely to seek new employment while the economic outlook is uncertain. Businesses are no longer seeing as much competition for workers with the right skills and experience, but the need for more generous compensation for workers who meet requirements remains.
Market Consensus Before Announcement
Forecasters see ADP's September employment number at 121,500. ADP's number for August was 99,000.
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.
