Private Sector Employment Decreases In September-ADP

ADP reported today that private sector employment declined in September by 39,000, which is much worse than the consensus of +23,000. Large job losses were seen in the construction and manufacturing sectors. It is hard to extrapolate from this data and say Friday's non-farm report will be negative because these two reports do not always match. However, you really start to doubt the consensus estimate of +75,000 private sector jobs in September.
From the press release:

Private-sector employment decreased by 39,000 from August to September on a seasonally adjusted basis, according to the latest ADP National Employment Report® released today. The estimated change of employment from July to August was revised up from the previously reported decline of 10,000 to an increase of 10,000.

The decline in private employment in September confirms a pause in the economic recovery already evident in other data. A deceleration of employment occurred in all the major sectors shown in The ADP Report and for all sizes of payroll. The September decline in employment followed seven monthly increases from February through August. However, over those seven months, the average monthly gain in employment was 34,000. There simply is no momentum in employment.

September’s ADP Report estimates employment in the service-providing sector rose by 6,000 in September, the eighth consecutive monthly gain. This increase was not enough to offset an employment decline in the goods-producing sector of 45,000. Construction employment dropped by 28,000 during September and manufacturing employment declined 17,000, the third consecutive monthly decline.


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