- US private employers added 90,000 jobs in September.
- Hiring rose from 36,000 in August after a three-month slowdown.
- Pay growth remained solid, with base pay up 3.2 per cent.
US private-sector hiring picked up in September, with employers adding 90,000 jobs, according to payroll company ADP.
The increase was well above the 36,000 jobs added in August, a figure that was revised down from 38,000. It also exceeded the 68,000 increase expected by economists in a Dow Jones survey.
The figures suggest some stabilisation in the US labour market after three months of slowing private-sector job creation. However, the ADP report is not a direct predictor of the Government's official employment figures, and the more closely watched Bureau of Labor Statistics jobs report is due on Friday.
“It's a strong report,” said Nela Richardson, ADP's chief economist. “After a three-month slowdown, job creation rebounded and pay growth remained solid.”
Which sectors added the most jobs?
The biggest increase came from education and health services, which added 55,000 jobs in September.
Leisure and hospitality added another 22,000, while manufacturing employment increased by 17,000 and construction added 15,000.
Overall, service providers accounted for 59,000 new jobs, while goods-producing businesses added 31,000.
The recovery was not spread evenly across the economy.
Financial activities lost 16,000 jobs, while professional and business services shed 11,000. Natural resources and mining lost another 1,000 positions.
By region, the Northeast accounted for the largest increase, adding 56,000 jobs.
Mid-sized businesses also led hiring by company size. Firms employing between 50 and 499 workers added 54,000 jobs.
What does the jobs rebound mean for the US economy?
Pay growth remained positive alongside the hiring increase.
ADP said base pay rose 3.2 per cent from a year earlier in September, while gross pay increased 4.7 per cent. For workers who stayed in the same job, base pay rose 3 per cent, while those changing jobs saw base pay rise 4.8 per cent.
The figures come as the Federal Reserve continues to assess the balance between employment and inflation.
The US central bank raised its benchmark interest rate by 0.25 percentage points earlier this month, taking the target range to 3.75 per cent to 4 per cent. Reuters reported that policymakers have increasingly focused on persistent inflation while viewing the labour market as relatively stable.
The next major test comes on Friday, when the Bureau of Labor Statistics publishes its September employment report.
Reuters' latest survey of economists expects the official report to show 90,000 non-farm jobs added in September, with the unemployment rate remaining at 4.1 per cent.
The ADP figures should therefore be treated as an early indicator rather than a definitive picture of the US jobs market. Reuters notes that ADP's private-payroll measure has historically not closely matched the BLS estimate.
For now, the September report provides evidence that private hiring accelerated after a three-month slowdown, while wage growth continued to hold up.
