US Private Employers Exceed Expectations in September Hiring – ADP

In September, the number of workers hired by private employers in the US exceeded expectations, rebounding from a three-and-a-half-year low recorded in the previous month. According to data from payroll processor ADP, private payrolls increased by 143,000 last month, up from an upwardly-revised figure of 103,000 in August. Economists had anticipated a gain of 124,000.

This data serves as an important precursor to the upcoming nonfarm payrolls report, which will be closely observed by investors looking for insights into the health of labor demand in the US. These figures could influence the Federal Reserve’s strategy regarding potential interest rate cuts later this year.

Last month, the Fed reduced rates by half a percentage point, a decision officials later explained was aimed at boosting labor demand amidst easing price pressures. In a statement, Fed Chair Jerome Powell indicated that future moves would likely involve more standard quarter-point reductions, emphasizing that there is no fixed course for borrowing costs.

Powell also mentioned that the Federal Open Market Committee is not rushed to implement rapid rate cuts. He justified last month’s significant decrease as a reflection of the FOMC’s confidence that with an appropriate adjustment to policy, the strength of the labor market could be sustained amidst moderate economic growth and a decline in inflation toward the 2% target.

Additionally, US job openings showed an unexpected slight increase in August, suggesting some resilience in labor demand amid a cooling job market in the third quarter. The Job Openings and Labor Turnover Survey revealed that available positions rose to 8.040 million at the end of August, up from a revised total of 7.711 million in July. Economists had forecast a small drop to 7.640 million. The July figure had touched its lowest point in over three years, indicating a potential slowdown in the job market, although this was seen as a more orderly adjustment.