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Private Sector Payrolls Decline by 32,000 in September, Signaling Weakening Labor Market
Private sector payrolls across the U.S. experienced a notable drop of 32,000 jobs in September, according to a report released Wednesday by ADP. This figure represents the largest monthly decline in employment since March 2023.
The report also included a significant revision to August’s figures, which were initially reported as an increase of 54,000 jobs but have since been adjusted to reflect a decrease of 3,000.
Nela Richardson, chief economist with ADP, stated that these employment drops indicate a weakening trend in the labor market. “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,” Richardson commented.
Service-related industries saw an overall reduction of 28,000 jobs. Specific sectors experiencing declines included leisure and hospitality (-19,000), professional and business services (-13,000), financial activities (-9,000), trade, transportation, and utilities (-7,000), and other services (-16,000). In contrast, education and health services added 33,000 jobs, and the information sector saw an increase of 3,000 positions.
Within goods-producing industries, there was a net loss of 3,000 jobs. Construction shed 5,000 positions, and manufacturing lost 2,000. However, the natural resources and mining sector managed to add 4,000 jobs.
Despite the overall decrease in employment, the ADP report indicated a 4.5% year-over-year increase in pay.
The monthly jobs report from the Bureau of Labor Statistics, which was also expected to be released Wednesday, has been delayed due to the government shutdown that went into effect at midnight.