U.S. hiring rises at slower pace in September: ADP
American firms continued to hire in September but at a slower pace as businesses have become more cautious, according to private payrolls firm ADP on Wednesday.
Concerns about a slowing U.S. economy have risen in recent weeks as the U.S. President Donald Trump's trade war with China is impacting companies and showing up in economic data, including the contraction in the manufacturing sector.
Job gains in the service sector, the main driver of the economy, slowed sharply, bringing the total increase in new private jobs to 135,000, well below the consensus forecast.
However, the blockbuster increase originally reported for August was revised down sharply, to show an increase of just 157,000, nearly 40,000 fewer jobs, according to the ADP data.
"The job market has shown signs of a slowdown," Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a statement. "The average monthly job growth for the past three months is 145,000, down from 214,000 for the same time period last year."
The report is closely scrutinized for signals on the all-important government employment report due out Friday. Economists expect official data to show private hiring rose 120,000 in September.
The ADP report showed services companies added 127,000 jobs last month, with big gains in health care, transportation and professional services, but that was after two months with gains over 140,000.
Goods-producing industries made just 8,000 new hires, not enough to recoup the 30,000 jobs lost from May to July. And mining lost another 3,000 positions, continuing the decline seen since late 2018, ADP said.
"Businesses have turned more cautious in their hiring. Small businesses have become especially hesitant," said Mark Zandi, chief economist of Moody's Analytics which helps produce the report.
"If businesses pull back any further, unemployment will begin to rise."