Private payroll increases by 568,000 in September, faster than expected

Companies got rid of concerns over the delta variant of Covid and hired at a faster rate than expected in September, according to a report released on Wednesday by payroll company ADP.

Private jobs were up 568,000 for the month, better than economists’ Dow Jones estimate of 425,000 and ahead of the revised downward reading of 340,000 in August. The initial August report showed growth of 374,000.

The report comes amid concerns about how quickly hires would increase given lingering fears about the delta gap and signs that the rapid economic growth of 2021 was starting to slow as fall approached. , in particular due to supply chain bottlenecks which have driven inflation up sharply.

“The labor market recovery continues to progress despite a sharp slowdown from 748,000 jobs in the second quarter,” said Nela Richardson, chief economist of ADP.

Stock market futures were at their lowest the morning after the release, while government bond yields rose.

The critical leisure and hospitality sector led job creation with 226,000 hires. The sector was hit hardest during the pandemic and struggled the most to regain ground as it is the most sensitive to economic reopening. Establishments are grappling with labor shortages despite nearly 2 million job offers.

Although the industry, which includes bars, restaurants, hotels and more, employs around 800,000 more workers than a year ago, its unemployment rate remains at 9.1%, compared to the national rate. 5.2%, according to data from the Ministry of Labor through August. .

Much of this hiring appears to come from hotels and large chains, as companies with 500 or more employees led the job creation with 390,000. Companies with less than 50 workers added. as 63,000 jobs, while mid-sized companies contributed 115,000.

The faster pace of job creation is accompanied by a decline in Covid cases nationwide, despite a few localized hot spots. The total number of cases in the United States averaged 97,909 on a continuous seven-day basis through Monday, up from 160,284 a month ago, according to the CDC.

As usual, services dominate with 466,000 new hires, helped by education and health services with 66,000, professional and commercial services with 61,000 and 54,000 in commerce, transport and public services.

However, producers of goods posted a strong gain of 102,000. Manufacturing contributed 49,000 and construction added 46,000.

The ADP report serves as a precursor to the more widely watched non-farm payroll publication by the Labor Department on Friday. Economists’ Dow Jones estimate is 500,000 new jobs after falling just 235,000 in August. However, the two ratios can differ significantly. Until August, ADP’s private wage bill had exceeded the government’s count by an average of 37,000 per month.