Home Business ADP Reports that the US Private Sector Adds 162,000 Jobs

ADP Reports that the US Private Sector Adds 162,000 Jobs

When you purchase through our sponsored links, we may earn a commission. By using this website you agree to our T&Cs.

The latest report from the ADP Research Institute showed that the private sector added 162,000 jobs in September. The figure exceeded the 140,000 estimate by analysts, which is a positive sign that could help build the economic confidence for President Barack Obama before the first presidential debate on Wednesday night, October 3 at 6:00 PM Pacific Time.

ADP Reports that the US Private Sector Adds 162,000 Jobs

Based on the jobs report,  In September, the private service-providing sector added 144,000 jobs, the goods purchasing sector hired 18,000 jobs, and the financial services sector hired additional 7,000 jobs. Employment in the manufacturing industry increased by 4,000 jobs while the construction industry surged by 10,000 jobs.

According to ADP, the estimated improvement in employment last August decreased by 12,000 to 189,000 jobs. In July, the number of new jobs added was also reduced by 17,000 to 156,000 jobs.

Data from the ADP report also showed that companies with more 500 employees hired additional 17,000 jobs. Medium size companies with 50-499 workers increased recorded an increase of 64,000. Small businesses with 49 employees posted additional 81,000 jobs.

Out of the 64,000 new jobs created by medium size companies, the 10,000 jobs were added by goods producing sector and the remaining 54,000 was created by the service-providing sector.

A report from Financial Times cited a comment from Jim O’Sullivan, chief US economist at High Frequency Economics regarding ADP’s jobs data for the September. According to Sullivan, the research institute over-estimated its employment forecast. He said, “Unfortunately, the ADP series has not been especially helpful for refining payrolls forecasts. It over-estimated by 98,000 last month. Over the past two years, misses have ranged from -184,000 (with payrolls weaker than ADP) to +116,000, limiting the information value of the data. Government payrolls can also be quite volatile.”

In August, ADP reported that the U.S. private sector added 201,000 new jobs, but the employment data from the Department of Labor showed only 96,000 new jobs created. The Department of Labor is scheduled to release its jobs report for September on October 5. Analysts expect the Labor Department to release 113,000 new jobs created last month.

Paul Dales, senior US economist at Capital Economics said the signs that the unemployment rate will go down below 8 percent is slim. He said, “The indicators that provide some steer of where the unemployment rate is heading over the next few months supply little evidence that it will dip below 8 per cent. What’s more, we doubt that grow domestic product will be strong enough next year to drive the unemployment rate as low as the Federal Reserve hopes.”

Last month, Federal Reserve Chairman Ben Bernanke announced a third quantitative easing (QE3) to help revitalize the economy, and to reduce the unemployment rate. The Fed would spend $40 billion to buy mortgage-backed securities until the labor force improves. Bernanke believed the previous quantitative easing helped improved the economy and created 2 million jobs.

Although the growth rate declined in the latest survey, the index still shows that service sector hiring remains positive. In light of this morning’s ADP survey and the aforementioned service sector employment index, the risks to our payroll forecast are balanced. Detusche Bank is maintaining their forecast of +110k on headline (+120k private) and expect the unemployment
rate to remain unchanged at 8.1%.

Our Editorial Standards

At ValueWalk, we’re committed to providing accurate, research-backed information. Our editors go above and beyond to ensure our content is trustworthy and transparent.

Marie Cabural
Editor

Want Financial Guidance Sent Straight to You?

  • Pop your email in the box, and you'll receive bi-weekly emails from ValueWalk.
  • We never send spam — only the latest financial news and guides to help you take charge of your financial future.