Photo of a help wanted sign along Middle Country Road in Selden on July 20, 2021.
Thomas A. Ferrara/Newsday RM/Getty Images
US private-sector firms added 568,000 jobs in September, ADP said in its monthly employment report.
That beat the median forecast for a 428,000-payroll gain and reflected a rebound in hiring.
Last month saw Delta case counts hit their peak and signals the recovery could return to its past speed.
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Hiring in the US private sector exceeded economists’ expectations in September, hinting that the labor market’s recovery was back on track as the Delta wave crested.
Private payrolls rose by 568,000 last month, ADP said in its monthly employment report. Economists surveyed by Bloomberg expected a print of 428,000. The gain is the largest since June and reflects stronger job growth than August’s revised gain of 374,000 jobs.
The report suggests the economic recovery rebounded in September. Several factors likely guided the trend. The Delta wave reached its peak halfway through the month, and cases have steadily declined in recent weeks. The downtrend signals the country can reverse mask-wearing mandates and other restrictions that emerged through the summer. It could also revitalize spending at in-person services and juice sectors most closely tied to reopening.
To be sure, the US isn’t in the clear just yet. Daily case counts remain elevated. Weekly filings for unemployment insurance have swung higher in recent weeks. And Americans’ hopes for recovery are still gloomy. Consumer sentiment rose only slightly from decade-lows in September, as did expectations for the country’s future performance, according to the University of Michigan’s Surveys of Consumers.
„The labor market recovery continues to make progress despite a marked slowdown from the 748,000 job pace in the second quarter,” Nela Richardson, chief economist at ADP, said in the report. „Current bottlenecks in hiring should fade as the health conditions tied to the COVID-19 variant continue to improve, setting the stage for solid job gains in the coming months.”
The month also saw the federal government’s boost to unemployment insurance expire. The government had been padding weekly benefits with a $300 payment since March, but the boost lapsed on September 6 for the 24 states that didn’t end the supplement early. Conservative lawmakers argued the benefit disincentivized jobless Americans from finding work, yet studies suggest ending the benefit did more harm to states’ economies than good. The Wednesday data suggests the pullback encouraged some to return to the labor market.
Economists will get more insights into August hiring on Friday morning, when the government is scheduled to publish its nonfarm payrolls report for September. The August report showed job gains coming in at less than a third of economist forecasts. Experts expect the economy to have added 473,000 jobs last month. The forecast implies a significant recovery from August’s figures, but with COVID uncertainties looming large, estimates have been unreliable.
Just how the labor market is rebounding
The ADP report sheds more light on September hiring apart from the headline payrolls figure. Service businesses were the „superhero” of the month and counted for the „lion’s share” of September gains, Richardson said. The category counted for 466,000 of the month’s jobs increase. Leisure and hospitality businesses added 226,000 jobs. Education and health services firms counted for the second-largest sector increase, with a gain of 66,000 payrolls.
Large businesses – those with more than 500 employees – counted for most of the month’s growth, with a gain of 390,000 payrolls. Firms with 50 to 499 workers added 115,000 jobs, and businesses with fewer than 50 employees took on 63,000 more workers.
While the September report marked a significant improvement from August’s sluggish growth, the reading doesn’t guarantee a rebound, Richardson told reporters on a Wednesday call. The country is still grappling with dire supply bottlenecks and an extraordinary labor shortage. Even though September showed strong gains, there’s still „marked unevenness” throughout the recovery, Richardson said.
„It’s just a bumpy recovery, and it’s a recovery that’s still linked to the pandemic and to the Delta variant,” she added. „The pandemic has always been in the driver’s seat of the jobs recovery and that continues to be the case.”