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US - ADP report indicates softer job market, growth less than expected

October 02 2013

U.S. private-sector employment rose by 166,000 jobs in September, according to the national employment report released today by Automatic Data Processing Inc. (NASD: ADP). August’s employment growth was revised down to 159,000 from 176,000.

The increase is less than expected. Economists surveyed by both Reuters and Bloomberg had forecasted the report would show a gain of 180,000 jobs.

“The job market appears to have softened in recent months,” said Mark Zandi, chief economist at Moody’s Analytics, which produces the report with ADP. “Fiscal austerity has begun to take a toll on job creation. The run-up in interest rates may also be doing some damage to jobs in the financial services industry. While job growth has slowed, there remains a general resilience in the market. Job creation continues to be consistent with a slowly declining unemployment rate.”

ADP's data comes even as a report by The Conference Board found that online job ads rose in September by the largest number since the start of the year.

According to ADP's report, the service-providing sector added 147,000 jobs in September, down from 152,000 in August. Trade/transportation/utilities added the most jobs in September with 54,000. Professional/business services employment rose by 27,000, while financial activities shed 4,000 jobs.

The goods-producing sector added 19,000 jobs in September, a slight increase over its August growth rate. Construction payrolls added 16,000 jobs, while manufacturing payrolls increased by 1,000.

Small businesses added the most jobs in the month with 74,000, followed by large firms with 64,000 jobs. Medium-sized companies added 28,000 jobs.

The report is derived from a sample of ADP data from approximately 400,000 U.S. business clients representing more than 23 million U.S. employees. Methodology utilizes ADP payroll data, U.S. Bureau of Labor Statistics employment data, and the Philadelphia Federal Reserve Bank’s Aruoba-Diebold-Scotti Business Conditions Index.

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