US private employers shed 32,000 jobs in September, the latest sign that the labor market is in a serious pullback.
The data out Wednesday from payroll processor ADP was far below economists’ expectations of 51,000 jobs added. Private payrolls for August were also revised sharply lower to a loss of 3,000, after data initially showed a gain of 54,000.
“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 US employers have been cautious with hiring,” ADP chief economist Nela Richardson said in a statement.
The drop in private payrolls was led by small- and medium-size businesses, though companies employing over 500 people actually added 33,000 positions in September, ADP said. By sector, service-providing companies — including leisure and hospitality as well as business services — suffered in particular, seeing a decline of 28,000 positions.
Pay gains for workers who changed jobs in September slid to 6.6% from 7.1% a month earlier. Annual pay growth for job-stayers remained steady.
With the US jobs report for September likely to be delayed due to the government shutdown, private payroll data is in greater focus among economists and market watchers.
Read more: How a government shutdown would affect your student loans, Social Security, and more
Recent government data releases have suggested a job market in stasis. The pace of new positions being added to the economy has slowed dramatically, with the country even losing 13,000 positions in June for the first time since 2020, according to the Bureau of Labor Statistics. ADP data for that month also showed a drop in payrolls among private employers, though by a larger number: 23,000.
The unemployment rate, meanwhile, hit 4.3% in August, its highest level since October 2021. And, while the number of available positions increased slightly that month, according to data released by the government on Tuesday, the hiring rate and level of workers quitting their jobs declined as Americans clung to their positions and employers remained hesitant to add staff in an economy defined by uncertainty.
Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at emma.ockerman@yahooinc.com.
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