The U.S. job market showed signs of resilience in September as private sector employment rebounded according to a report released by ADP. The report indicates that employment increased by 90,000 jobs for the month, surpassing the revised downward figure of 36,000 for August and exceeding the Dow Jones forecast of 68,000.
A closer look at the data reveals a balanced distribution of job creation across various sectors. Service providers accounted for the majority, adding 59,000 positions, while goods-producing industries contributed 31,000 jobs.
Pay trends also appeared robust, with base salaries rising by 3.2% year-over-year and gross pay experiencing a notable surge of 4.7%. “It’s a strong report,” said Nela Richardson, chief economist at ADP. “After a three-month slowdown, job creation rebounded and pay growth remained solid.”
Sector Contributions and Employment Trends
The education and health services sectors were the most significant contributors, generating 55,000 new positions. Other sectors that saw growth included:
- Leisure and hospitality: 22,000 jobs
- Manufacturing: 17,000 jobs
- Construction: 15,000 jobs
Conversely, a few sectors experienced reductions in employment, namely:
- Financial activities: -16,000 jobs
- Professional and business services: -11,000 jobs
- Natural resources and mining: -1,000 jobs
Regional Insights and Company Size Impact
The Northeast region emerged as a strong driver of job growth, adding 56,000 positions. Notably, companies with a workforce of between 50 and 499 employees added 54,000 jobs during this period.
This report aligns with perspectives from several Federal Reserve officials who have expressed confidence in the stability of the labor market after previous concerns regarding growth in 2025. Policymakers are increasingly focused on navigating persistent inflationary pressures, which prompted a recent quarter-point increase in benchmark borrowing rates.
Looking Ahead
The ADP employment figures often serve as a preliminary indicator ahead of the more comprehensive nonfarm payrolls report from the Bureau of Labor Statistics, scheduled for release this Friday. The consensus estimates suggest a gain of 84,000 jobs, a decrease from August’s increase of 162,000, with the unemployment rate projected to remain steady at 4.1%.
