Privately run businesses created 135,000 new jobs in September, ADP says.
The numbers: The nation’s businesses added a modest 135,000 private-sector jobs in September, ADP said, in another sign that hiring is slowing along with the broader U.S. economy.
Economists polled by Econoday had forecast a gain of 152,000.
ADP also reduced its estimate of new jobs created in August to 157,000 from an original 195,000.
The mediocre increase in hiring added to a negative vibe in premarket trading, one day after a closely followed manufacturing barometer fell to the lowest level since the last recession. Stocks were set to open sharply lower.
ADP is the country’s largest processor of paychecks for thousands of companies and millions of workers.
What happened: Big companies added 67,000 jobs, mid-sized firms hired 39,000 new workers and small businesses filled 30,000 positions.
“Businesses have turned more cautious in their hiring,” said Mark Zandi, chief economist of Moody’s Analytics. “Small businesses have become especially hesitant. If businesses pull back any further, unemployment will begin to rise.”
Health care led the way, as it often has, by creating 35,000 new jobs. An aging population requires more doctors and caregivers.
Trade and transportations jobs increased by 28,000 while professional and business services hired 20,000 people. Construction firms filled 9,000 jobs. Manufacturing employment barely rose.
The ADP report, produced in tandem with Moody’s Analytics, helps evaluate the health of the U.S. labor market.The ADP employment figures tend to track the government’s official jobs estimate over time, but they can vary widely from month to month.
The government’s report, which also includes government workers, comes out Friday. Economists polled by MarketWatch predict a 147,000 increase.
Big picture: Hiring in the U.S. has tapered off since the end of 2018. There’s even been reports that some companies are reducing employment for the first time in years, though so far these job cuts have not shown up in the weekly tally of Americans applying for unemployment benefits.
Economists predict job creation will continue to slow owing to the ongoing trade war with China that has damaged the global economy and boomeranged on the U.S. Manufacturers and exporters have been particularly hard hit.
What they are saying? “The job market has shown signs of a slowdown,” said Ahu Yildirmaz, co-head of the ADP Research Institute. “The average monthly job growth for the past three months is 145,000, down from 214,000 for the same time period last year.”