US private-sector employment increased by 90,000 jobs in September, showing a clear rebound after a three-month slowdown in hiring, according to the latest ADP National Employment Report. The gain exceeded the 70,000 increase expected in a Reuters poll and followed a downwardly revised rise of 36,000 in August. The earlier August estimate had shown a 38,000 increase. CNBC also reported that private job creation strengthened after the recent slowdown, putting labor-market conditions back in focus ahead of the government’s broader employment release.
The September improvement was led by service-producing industries. Education and health services added 55,000 positions, while leisure and hospitality employment increased by 22,000. Manufacturing added 17,000 jobs and construction gained 15,000. Those advances were partly offset by declines in financial activities, which lost 16,000 positions, and professional and business services, where employment fell by 11,000. Trade, transportation and utilities employment was unchanged during the month.
The report also showed that hiring was not concentrated in a single business-size category. Medium-sized companies with 50 to 499 employees added 54,000 positions, while large employers with at least 500 workers gained 34,000. Small businesses added 23,000 jobs. ADP said base pay increased 3.2% from a year earlier and gross pay rose 4.7%, indicating that wage growth remained positive as employment recovered from the weaker August reading.
ADP produces the report with the Stanford Digital Economy Lab using private payroll information. Reuters noted that the ADP series has not consistently tracked the Bureau of Labor Statistics’ estimate of private payrolls, so the September result is not a direct forecast of the official employment report. The latest government data nevertheless showed some moderation in labor demand: job openings fell in August, leaving 1.01 vacancies for every unemployed person, down from 1.06 in July. Economists cited by Reuters continued to characterize the labor market as stable.
What it means for traders: The stronger-than-expected ADP reading adds evidence of resilience in private hiring, but the government report remains the more comprehensive test for the labor-market outlook. Reuters’ survey expects official private payrolls to rise by 85,000 in September after a 127,000 increase in August. Total nonfarm payrolls are forecast to gain 90,000 after a 162,000 rise, while the unemployment rate is expected to remain at 4.1% for a third month. For EUR/USD and USD/JPY, the key issue is whether the official figures confirm the ADP rebound and alter expectations for Federal Reserve policy.
The next focus is the Labor Department’s September employment report, due Friday. A result close to the forecasts would show continued job creation at a slower pace than in August, while a material difference from ADP would again highlight the methodological gap between the two series. Traders will also examine the unemployment rate, the split between private and public hiring, and the wage measures in the government release. Together, those details will provide a fuller picture of whether September’s private-sector improvement marks a durable turn or a one-month rebound.