U.S. job growth slowed in September, with companies adding the fewest private sector jobs since the start of 2021.
Private sector employment rose by 89,000 jobs last month, and annual pay was up 5.9%, according to the latest National Employment Report published Wednesday by the ADP Research Institute in collaboration with Stanford Digital Economy Lab.
“We are seeing a steepening decline in jobs this month,” ADP Chief Economist Nela Richardson said in a news release.
Although jobs increased overall by 89,000 in September, many companies were, at the same time, scaling back their headcount.
According to the report, larger U.S. companies (those with 500+ employees) drove the slowdown in September, shedding approximately 83,000 jobs and wiping out most of the gains made in August.
While most of the slowdown was caused by large companies, small-to-mid-sized companies saw the opposite. Small U.S. companies (those with 1-49 employees) added 95,000 jobs in September, while mid-sized companies (those with 50-499 employees) added 72,000 jobs.
Sectors that saw job increases included natural resources/mining (+4,000), construction (+16,000), information (+1,000), financial activities (+17,000), education & health services (+10,000), leisure & hospitality (+92,000), and other services (+6,000).
On the other hand, the sectors that saw job decreases during the month were manufacturing (-12,000), trade, transportation, & utilities (-13,000), and professional & business services (-32,000).
Additionally, Richardson highlighted the steady wage decline over the past 12 months.
Overall, annual pay growth has slowed consecutively over the past 12 months, with pay gains for those switching jobs falling to 9% in September from 9.7% the month prior. Pay gain for “job-stayers” was 5.9%.
The government’s jobs report on Friday is expected to show an increase of 155,000 private-industry payrolls for September. However, while ADP figures can help gauge the overall strength or weakness of private-sector employment, they should not be used to forecast changes to employment data reported by the Bureau of Labor Statistics.
“Leaving aside the loose relationship between the ADP and BLS data, the ADP figures do show a moderating trend for job growth in recent months, which we think is very roughly consistent with what should be going on in the labor market,” said Daniel Silver, an economist at JPMorgan Chase & Co., per Bloomberg News.
The next ADP National Employment Report will be released on November 1.
The Dallas Express reached out to the media team at ADP for comment on the report but had not heard back at the time of publishing.
