U.S. ADP Employment Firms in September; Wage Growth Moderates
by:Tom Moeller
|in:Economy in Brief
Summary
- Broad-based job growth follows earlier slowdown.
- Construction employment remains notably firm.
- Wage growth for “job changers” has weakened considerably.
The ADP National Employment Report indicated that nonfarm private sector payrolls rose 143,000 (1.3% y/y) during September following a 103,000 August increase, revised from 99,000 and an unrevised 111,000 July gain. These increases compare to a 166,000 average in the first six months of this year and are below the most recent high of 211,000 in March of this year. A 125,000 September rise in ADP employment had been expected in the Action Economics Forecast Survey.
Growth in median annual pay for "job stayers" eased to 4.7% y/y in September. It remained the weakest growth since April 2021 and well below a September 2022 high of 7.8% y/y. Pay increases in education & health services of 5.1% y/y compared to a high of 7.3% in October 2022 while construction sector earnings rose a lessened 5.1% y/y. Manufacturing pay growth of -0.1% y/y has been weak and roughly steady for most of this year, and leisure & hospitality pay rose a diminished 4.7% y/y. Professional & business services pay grew a lessened 4.6% y/y, down from a 6.9% high in October 2022. Pay increases for “job changers” averaged a lessened 6.6% y/y last month. Downward momentum in pay gains has accelerated with growth well below the 16.4% y/y peak in June 2022.
Small business hiring (less than 50 employees) declined 8,000 (+0.1% y/y) last month after falling 12,000 in August. Employment at medium-sized firms (50-499,000 employees) rose 64,000 (1.8% y/y) after a 71,000 August increase. These gains stood below the March high of 113,000. Large business hiring (500+ employees) rose 86,000 (3.2% y/y) during September following a 48,000 August gain. It a s the largest increase since May.
Goods-producing employment rose 42,000 last month (1.2% y/y) after a 30,000 August rise. The number of construction sector jobs rose 26,000 (3.7% y/y) following a 31,000 July increase. Monthly gains have been near this level all year. Hiring in the manufacturing sector rose 2,000 (-0.1% y/y) last month, the first rise since April. Natural resource & mining hiring improved 14,000 (-0.4% y/y) after a 9,000 rise in August. Jobs here were falling in Q2.
The number of service-producing jobs rose 101,000 (1.3% y/y) in September following a 73,000 August gain. Leisure & hospitality employment rose 34,000 (1.7% y/y) after improving 11,000 in August and education jobs gained 24,000 (2.1% y/y) in September, the same as in August. The number of jobs in trade, transportation & utilities increased 14,000 last month (1.1% y/y), also the same as in August. Employment in “other” services rose 17,000 (3.6% y/y) after increasing 22,000 in August. Professional & business services employment rose 20,000 (0.2% y/y) after falling in three of the prior four months. Information employment fell 10,000 (-2.0% y/y), the sixth consecutive monthly decline.
The ADP National Employment Report and Pay Insights data can be found in Haver's USECON database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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