U.S. private-sector hiring accelerated in September, offering fresh evidence that the labor market continues to expand even as consumers become increasingly concerned about employment conditions.
Private employers added 90,000 jobs during the month, according to the ADP National Employment Report. Economists surveyed by Reuters had expected an increase of 70,000.
August’s gain was revised down to 36,000 from the previously reported 38,000.
The stronger September number arrives at an important point for Federal Reserve policy.
Policymakers are attempting to determine whether elevated borrowing costs are cooling the economy enough to contain inflation without producing a sharp deterioration in employment.
The ADP report suggests private hiring has not stalled, but the pace remains moderate compared with stronger labor-market periods.
Recent government data have also shown some cooling beneath the surface. Job openings declined in August, while the ratio of openings to unemployed workers slipped to 1.01 from 1.06 in July. Meanwhile, a Conference Board survey released Tuesday showed consumers becoming more pessimistic about labor-market conditions.
Attention now shifts to the Bureau of Labor Statistics’ September employment report.
Economists surveyed by Reuters expect approximately 90,000 nonfarm jobs to have been added in September, following a 162,000 increase in August. The unemployment rate is expected to remain at 4.1%.
ADP and the government’s payroll report use different methodologies and frequently diverge, so Wednesday’s number should not be treated as a direct prediction of Friday’s result.
For markets, the significance lies in the broader combination of employment and inflation data.
A resilient labor market gives the Fed more flexibility to keep monetary policy restrictive if inflation remains elevated. A sharp weakening in Friday’s government report would point in the opposite direction.
