ADP Report Shows Payrolls at U.S. Employers Cooled in September

(Bloomberg) -- Payrolls at companies in the U.S. increased less than forecast in September and the prior month’s gain was revised lower, suggesting a manufacturing recession, a fragile global economic outlook and the lingering trade war with China are gradually impacting hiring decisions.

Private payrolls increased by 135,000 after a revised 157,000 gain in August, according to data out Wednesday by the ADP Research Institute. That was the smallest advance in three months and slightly less than the 140,000 median projection in a Bloomberg survey of economists after a previously reported 195,000 August increase.

Key Insights

• Economists and analysts are closely watching employment data to see if the recession plaguing the manufacturing sector has started to seep into the broader labor market.
• The data precede the Labor Department’s September employment report out Friday, which is forecast to show private payrolls increased by 130,000 in September, below the average monthly pace seen across the decade-long expansion. The unemployment rate is expected to hold at 3.7% as wage gains hold up.
• Goods-producing jobs increased 8,000, the ADP data showed.
• Service-provider employment rose 127,000 in September.

Economist’s View

“Businesses have turned more cautious in their hiring,” Mark Zandi, chief economist at Moody’s Analytics, said in a statement. Moody’s produces the figures with ADP. “Small businesses have become especially hesitant. If businesses pull back any further, unemployment will begin to rise.”

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• Hiring at small businesses increased 30,000 and large businesses added 67,000 to payrolls.
• ADP’s payroll data represent about 411,000 firms employing nearly 24 million workers in the U.S.

To contact the reporter on this story: Reade Pickert in Washington at epickert@bloomberg.net

To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Vince Golle

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