Private sector job growth fell well below expectations: ADP

A key employment measurement for the U.S. economy came in well below expectations for September, indicating some labor market weakness amid other signs of strength.

The U.S. economy added 89,000 private-sector jobs in September, according to payroll firm ADP. Economists polled by Dow Jones were expecting nearly double that amount at 160,000 jobs.

Numbers for August were revised up to 180,000 jobs added to the economy.

“We are seeing a steepening decline in jobs this month,” Nela Richardson, chief economist for ADP, said in a statement. “Additionally, we are seeing a steady decline in wages in the past 12 months.”

Leisure and hospitality jobs drove the gains in September, adding 92,000 jobs, while transportation jobs decreased by 13,000 and business services jobs dropped by 32,000.

Broken down by business size, small and medium-sized businesses added 167,000 jobs, while large companies shed 83,000 jobs on the month.

Workers who stayed in their jobs got an average 5.9-percent annual pay increase in September, making it the 12th consecutive month of slowing wage growth, according to ADP.

Meanwhile, people who changed their jobs due to favorable labor market conditions earned a 9-percent annual pay increase, equaling the high point of inflation reached last June.

The numbers come ahead of the Friday employment report from the Labor Department, which will show if the labor market is continuing to cool. Economists expect 170,000 jobs to have been added in September, down from 187,000 in August.

Job openings jumped up in the Labor Department’s August turnover survey, released Tuesday.

Openings spiked to 9.6 million in August from 8.9 million in July, which was the lowest number since March 2021.

With about 6.38 million people looking for a job in the U.S. in August, the ratio of open jobs to job-seekers hit 1.5, a number that still favors workers. That’s down slightly from 1.52 in July, according to the latest numbers from the Labor Department.

The quits rate, a measure of worker confidence, remained even in August, the Labor Department reported.