ADP Report: September Private Payrolls Decline Amid Government Shutdown Concerns

September ADP Employment Report

• 📉 Private payrolls declined by 32,000 in September, significantly missing the estimate of 45,000.
• ⚠️ This figure is presented with an asterisk due to ADP incorporating recent BLS benchmark revisions.
• 💡 Without these revisions, the September number would have been positive 11,000, but the current figure reflects the new, slower growth rate.

Sectoral and Business Size Performance

• 🏢 Large businesses continued to hire, adding 33,000 jobs, while small businesses saw a decline of 40,000 and medium businesses down 20,000.
• 🏥 Education and health services remain a leading sector, adding 33,000 jobs.
• 🏖️ The leisure and hospitality sector experienced a notable decline, down 19,000 jobs.

Wage Growth and Revisions

• 💰 Job stayers saw wage growth of 4.5%, while job changers experienced 6.6% wage growth, a decrease from August's 7.1%.
• 📊 ADP's methodology involves re-benchmarking its data annually to BLS figures, which are based on a near-census of employment insurance-covered workers, though these figures have a six-month lag.

Economic Context and Fed Watch

• 📉 The overall narrative points to a slowdown in hiring momentum, consistent across revised and unrevised ADP data, and expected in BLS reports.
• 🏦 The Federal Reserve receives granular ADP data, indicating they are not flying blind during the government shutdown.
• ⚠️ A government shutdown does not directly impact ADP's data gathering as it relies on independent, non-survey data.

Future Outlook and Labor Market

• 🧐 While consumer spending remains robust, its ability to support broad-based job growth is a key question for labor economists.
• 📈 It is too early to determine if the labor market is re-accelerating or has hit bottom, requiring several more months of data.