U.S. Hiring Rebounds After 5 Months of Easing
Even with the pickup, the three-month average eased to 119,000, one of the lowest levels since 2020.
Hiring at U.S. companies picked up in September, snapping a five-month stretch of slower payrolls growth.
Private payrolls increased 143,000 last month after an August advance that was the weakest since March 2023, according to the ADP Research Institute in collaboration with Stanford Digital Economy Lab. The Bloomberg survey of economists had called for a gain of 125,000 jobs.
Even with the pickup, the three-month average eased to 119,000, one of the lowest levels since 2020. Other data also indicates the labor market is slowing: Unemployment has risen steadily in recent months, and separate measures of job growth have cooled, prompting the Federal Reserve to cut interest rates in September by a larger-than-usual amount to stem further weakening.
Fed Chair Jerome Powell on Monday described the labor market as solid but said conditions have “clearly cooled over the past year.” He added that “we do not believe that we need to see further cooling in labor market conditions” to achieve the central bank’s target of 2 percent inflation.
The ADP data precede the government’s monthly jobs report on Friday, which is forecast to show a second month of moderate payroll growth in September and the unemployment rate holding at 4.2 percent.
Separate data out Tuesday showed that while job openings unexpectedly increased in August, the hiring rate matched the lowest reading since 2013, excluding the onset of the pandemic. Another gauge from the Institute of Supply Management (ISM) showed the smallest share of respondents increasing manufacturing employment since May 2020.
Wage growth in September cooled. For workers who changed jobs, earnings rose 6.6 percent from a year earlier, the slowest since April 2021. Pay gains for those who stayed in their current position eased slightly to 4.7 percent, ADP’s report out Wednesday showed.
“Stronger hiring didn’t require stronger pay growth last month,” said Nela Richardson, chief economist at ADP. “Typically, workers who change jobs see faster pay growth.”
Hiring was broad across industries, led by leisure and hospitality as well as construction. Information was the only sector to cut jobs last month. Job gains were also spread out geographically, and firms with fewer than 20 employees were the only ones to reduce headcount.
While layoffs are still generally low, some companies in recent days have announced plans to let workers go. CVS Health Corp. plans to cut roughly 2,900 jobs as part of a strategic review of its business, while Samsung Electronics Co. is laying off workers in Southeast Asia, Australia, and New Zealand as part of a plan to reduce global headcount by thousands of jobs.
ADP bases its findings on payroll data covering more than 25 million U.S. private-sector employees.
.
Copyright 2024 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.