The Economy

U.S. Private Sector Shows Solid Job Growth

ADP reports that firms added 200,000 jobs in September, with the largest businesses accounting for more than half of the increase.
Matthew HellerSeptember 30, 2015

The U.S. private sector added 200,000 jobs in September, slightly above consensus expectations and broadly in line with recent trends, according to payroll processor ADP.

In its September employment report, ADP said Wednesday that the largest companies fueled most of the growth, adding 109,000 jobs. August employment growth was revised down by 4,000 jobs to 186,000.

“Businesses with more than 1,000 employees contributed over half of the job gains in September, despite weakness in energy and manufacturing,” Ahu Yildirmaz, head of the ADP Research Institute, said in a news release. “The largest companies appear to be starting to overcome the impacts of weak global demand and the high dollar, while the smallest companies may have pulled back as concerns about the resiliency of the U.S. economy grew and consumer confidence softened.”

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Payrolls for businesses with 49 or fewer employees increased by 37,000 jobs in September, less than half of the August gain, while employment among companies with 50 to 499 employees increased by 56,000 jobs, 18,000 fewer than the previous month.

The U.S. government will issue its official jobs report for September on Friday. Economists forecast that report will show employers added 206,000 jobs and the unemployment rate held at 5.1% for the second straight month.

“The overall labor market continues to improve, with domestic strength offsetting foreign weakness,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics, said in a note to clients.

Among the weak spots in ADP’s survey was manufacturing, which cut 15,000 jobs, the most in five years. Large manufacturing firms such as Caterpillar have suffered in the wake of slow growth in China, Brazil, and other emerging markets, according to the Associated Press.

Mark Zandi, chief economist at Moody’s Analytics, which compiles the ADP data, said oil and gas drilling firms are also shedding jobs because of the months-long drop in oil prices.

“Despite job losses in the energy and manufacturing industries, the economy is creating close to 200,000 jobs per month,” he said. “At this pace full employment is fast approaching.”

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