September ADP Report Shows 90,000 Job Gains, Reversing Labor Slowdown

Key points

• Private-sector jobs increased by 90,000 in September, up from 36,000 in August and above the consensus estimate of 68,000 to 73,000.
• Hiring accelerated for the first time since May, with education and health services adding 55,000 jobs, followed by leisure and hospitality (22,000) and manufacturing (17,000).
• Base pay rose 3.2% year-over-year, while gross pay increased 4.7%, indicating solid wage growth despite the earlier slowdown.
• The Northeast region led job creation with 56,000 new positions, and companies with 50 to 499 employees added 54,000 jobs.
• Financial activities lost 16,000 jobs, and professional and business services shed 11,000, showing sector-specific weakness despite overall gains.

Background

This report follows a period of slower hiring, with August adding only 36,000 jobs, the slowest pace in seven months. The September rebound aligns with earlier concerns about a cooling labor market, which had prompted Federal Reserve officials to prioritize inflation control over growth support. The strong data reinforces the view that the labor market remains resilient, potentially limiting the central bank's ability to cut interest rates.

How outlets are covering it

CNBC and Kitco both highlight the 90,000 job gain as a strong rebound, with ADP’s chief economist Nela Richardson calling it a 'strong report.' CNBC emphasizes the broader stabilization of the labor market and its implications for Federal Reserve policy, while Kitco focuses on the impact on gold prices, noting that spot gold traded near $4,184 per ounce, roughly flat on the day. Both outlets agree that the data gives the Federal Reserve room to continue fighting inflation, but CNBC stresses the balance between service and goods producers, while Kitco highlights the sector-specific losses in financial activities.

Why it matters

The strong ADP report suggests the U.S. labor market is stabilizing, which could limit the Federal Reserve's ability to cut interest rates amid persistent inflation. This has implications for financial markets, including gold prices, which are sensitive to labor market strength and interest rate expectations. The data also precedes the official nonfarm payrolls report, which is expected to show a gain of 84,000 jobs and an unemployment rate of 4.1%.

What to watch

The Bureau of Labor Statistics will release the nonfarm payrolls report on Friday, with a consensus estimate of 84,000 jobs added. The unemployment rate is expected to hold steady at 4.1%. Market participants will closely watch this data for further signals on the labor market's trajectory and its implications for Federal Reserve policy.