ADP: private employers added 90,000 jobs in September, and firms with 50 to 499 workers added 54,000 of them
Hiring beat the 68,000 forecast and rebounded from a revised 36,000 in August. Base pay growth of 3.2% came out the same morning PCE inflation printed 3.4%.
Private employers added 90,000 jobs in September, according to ADP's monthly payroll report. That was up from a downwardly revised 36,000 in August and above the Dow Jones consensus of 68,000, CNBC reported. Fox Business put the economists' estimate at 70,000. "It's a strong report," ADP chief economist Nela Richardson said. "After a three-month slowdown, job creation rebounded and pay growth remained solid."
Where the jobs were
| Sector | September change |
|---|---|
| Education and health services | +55,000 |
| Leisure and hospitality | +22,000 |
| Manufacturing | +17,000 |
| Construction | +15,000 |
| Trade, transportation and utilities | flat |
| Professional and business services | -11,000 |
| Financial activities | -16,000 |
Service providers added 59,000 jobs and goods producers 31,000. By region, the Northeast added 56,000.
The number behind the number
Companies with 50 to 499 employees added 54,000 jobs, according to CNBC's account of the report. That is 60% of the total. It leaves 36,000 for the smallest firms and the largest ones combined. The headline beat came mostly from the middle of the market, not from the corner shop or the megacap.
The pay figure deserves a second look because of what came out at the same hour. ADP said base pay rose 3.2% from a year earlier and gross pay rose 4.7%, CNBC reported. At 8:30 a.m., the Bureau of Economic Analysis reported that PCE prices rose 3.4% in the year to August. Base pay is running about 0.2 percentage point behind prices. Gross pay is still ahead of them. The same BEA report showed real disposable income flat in August and the saving rate down to 4.1%, which fits a picture of paychecks barely keeping up. Our PCE story has the detail.
Who it hits
Contractors. A 15,000 gain in construction jobs means crews are still being hired, which keeps pressure on wages for skilled trades. With prices up 3.4%, a raise below that is a pay cut in real terms for the worker, and base pay nationally is already rising 3.2%. Expect that math to come up at review time.
141,913 independent construction and contractors are listed on CheckThisBiz, a directory of 7,704,724 independent US businesses, including 12,896 in TX, 12,642 in CA, 11,414 in FL. Chains and franchises are excluded from that count, so these are the owner-operated businesses that actually apply for funding.
Restaurants and bars. Leisure and hospitality added 22,000. That fits the BEA's August data, where spending at restaurants and hotels was among the biggest gains. Hiring into a spending bump that households are paying for out of savings is a risk worth sizing carefully.
Rates. CNBC noted that Fed officials see persistent inflation, not jobs, as the bigger risk after the September rate hike. A firm hiring number takes away one argument for waiting.
What's next
The Bureau of Labor Statistics releases the September jobs report on Friday. The consensus is 84,000 jobs after 162,000 in August, with unemployment steady at 4.1%, CNBC reported. ADP and the BLS often diverge month to month, so Wednesday's number is a guide, not a preview. Bloomberg also reported the ADP figure.
Sources: CNBC; Fox Business; Bloomberg; U.S. Bureau of Economic Analysis; industry counts from CheckThisBiz. Shares and the pay-versus-prices comparison are our calculations. This is market information, not investment advice.
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