The Fed will surely be taking notice.
The private sector lost 32,000 jobs in September, marking the second time in a span of four months that it has lost jobs, according to the ADP National Employment Report.
In June, the private sector shed 33,000 jobs. That was the first time it had lost jobs in two years – now it has happened twice this summer alone.
Despite the strong economic growth we saw in the second quarter, this month’s release further validates what we’ve been seeing in the labor market, that U.S. employers have been cautious with hiring,” Dr. Nela Richardson, chief economist at ADP, said.
The 32,000 lost jobs were down from a gain of 54,000 jobs in August. It also fell way short of estimates, as economists had projected a gain of 45,000 jobs in September.
The declining job market should further support the notion that the Fed will lower interest rates again when it meets in October. The CME FedWatch gauge says 99% of interest rate traders now expect another 25-basis point rate cut in October, up from 92% a week ago.
Service industries shed 28,000 jobs last month
According to the ADP jobs report, roughly 28,000 service-producing jobs were lost in September, down from 42,000 new jobs in August.
Goods-producing jobs did not fare quite as badly, as only 3,000 jobs were shed, down from 13,000 added in August. Here’s a breakdown by industry.
- Education/health services: +33,000
- Natural resources/mining: +4,000
- Information: +3,000
- Leisure/hospitality: -19,000
- Other services: -16,000
- Professional/business services: -13,000
- Financial activities: -9,000
- Trade/transportation/utilities -7,000
- Construction: -5,000
- Manufacturing: -2,000
The Northeast saw the most jobs added, 21,000, followed by the West with 15,000 and the South with 3,000 jobs added. The Midwest got hammered, losing 63,000 jobs last month.
Large companies added 33,000 positions, while mid-sized firms shed 20,000 jobs and small companies lost 40,000.
Pay ticked up by 4.5% in September, from 4.4% in August among job stayers. For job changers pay rose 6.6% last month, slightly less than the 7.1% increase in August.
On Friday, the federal government releases the unemployment report for September, which includes public and private sector jobs.
