U.S. private sector employers added nearly three quarters of a million new jobs in September, payroll processing firm ADP said Wednesday, possibly setting up a stronger-than-expected reading of non-farm payrolls later this week.
The ADP’s national employment report show U.S. employment grew by 749,000 in September, a figure that came in well ahead of the Street consensus forecast of 650,000 and was also firmly in front of last month’s upwardly-revised tally of 481,000.
Large employers added the bulk of the September gains, ADP said, adding 297,000 workers to their overall payrolls. In terms of sectors, Services once again lead the September tally with 552,000 new jobs, with 186,000 of those coming in the trade, transport and utilities sector.
“The labor market continues to recover gradually,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “In September, the majority of sectors and company sizes experienced gains with trade, transportation and utilities; and manufacturing leading the way. However, small businesses continued to demonstrate slower growth.”
U.S. equity futures were modestly firmer following the data release, with contracts tied to the Dow Jones Industrial Average, which is down 3.44% for the month, suggesting a 35 point decline while those linked to the S&P 500, which has fallen 4.7% through September, are indicating a 2.5 point pullback.
The U.S. dollar index held 0.2% higher against a basket of six global currencies to 94.10 while benchmark 10-year Treasury note yields were modestly lower at 0.648%.
The Labor Department will publish its September employment report on Friday, with economists expecting a headline reading of 850,000.
“ADP has substantially understated the official private payroll numbers in recent months, but the error has narrowed consistently, and we’re guessing it will be about 200K in September,” said Ian Shepherdson of Pantheon Macroeconomics. “Accordingly, we look for an 950K increase in Friday’s private payroll number, slowing marginally from 1,027K in August and 1,481K in July. But this is far from certain, given the deviation between the ADP and official numbers since Covid struck.”