Private Payrolls Decline 32,000 In September, Defy Wall Street Expectations

Private payrolls declined by 32,000 in September, amid further signs of weakening labor market conditions. This represents the largest decline in private jobs in two and a half years, according to data from ADP. The figure is lower than the 53,000 decline seen in March 2023.

The September payroll decline stands in contrast with Wall Street expectations of an addition of 45,000 jobs during the month, according to MarketWatch.

“Despite the strong economic growth we saw in the second quarter, this month's release further validates what we've been seeing in the labor market, that U.S. employers have been cautious with hiring,” said Nela Richardson, chief economist at ADP.

Jobs in businesses with fewer than 50 employees witnessed a decline of 40,000, while large establishments with 500 or more employees added 33,000 jobs during September, according to the report.

On Tuesday, Federal Reserve Bank of Boston President Susan Collins stated that the current labor market weakness is due to the heightened uncertainty, resulting in anemic job gains. She said that this is “somewhat puzzling” amid healthy economic growth. “A continued productivity-enhancing mindset, which is ubiquitous in my discussions with CEOs across New England, may now be tempering hiring despite solid economic growth,” Collins added.

According to the CME FedWatch tool, there is a 99% probability of a 25-basis-point rate cut in October. Collins noted that it may be “appropriate to ease the policy rate a bit further this year,” but added that a further rate cut will hinge on inflation data.

Meanwhile, U.S. equities declined in Wednesday’s opening trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.45%, while the Invesco QQQ Trust (QQQ) fell 0.54%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bearish’ territory.

The iShares 7-10 Year Treasury Bond ETF (IEF) was up 0.43% at the time of writing.

Also See: Gold Price Hits New Record As US Government Enters Shutdown

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