After a weak ISM Manufacturing report on Tuesday, there had been some concerns that the job market might be taking a hit from the U.S./China trade war and slowing global growth story. Now the markets have seen the ADP private sector payrolls report, which gets used as a directional barometer for each monthly unemployment and nonfarm payrolls report. ADP’s private sector payrolls increased by 135,000 from August to September.
The September ADP National Employment Report beat the Wall Street Journal (Dow Jones) consensus forecast of 125,000. Econoday’s consensus estimate was matched at 135,000.
Small business jobs (fewer than 50 employees) added 30,000 jobs in September. The midsized category (50 to 499 employees) added 39,000 jobs and the large business sector (500 employees and higher) added 67,000 jobs.
Each monthly report is derived from ADP’s actual payroll data and measures the change in total nonfarm private employment each month on a seasonally adjusted basis. Both Moody’s and ADP have taken this payrolls report more cautiously than prior reports.
Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said: “The job market has shown signs of a slowdown. The average monthly job growth for the past three months is 145,000, down from 214,000 for the same time period last year.”
Mark Zandi, chief economist of Moody’s Analytics: “Businesses have turned more cautious in their hiring. Small businesses have become especially hesitant. If businesses pull back any further, unemployment will begin to rise.”