US private sector employers added 208,000 jobs in September, ADP said Wednesday.
It felt, for lack of a better way to describe the numbers, like a boring report. It’s also difficult to parse. Wednesday’s release was the second since ADP unveiled a revamped methodology. I, for one, am still adjusting.
The headline print essentially matched consensus, which was looking for 200,000. The slight upside surprise was vulnerable to a “good news is bad news” interpretation at a time when markets want cooler data to support a policy pivot narrative. It represented a re-acceleration from August’s downshift, although August was revised higher (figure below).
Gains were almost uniform across firm size. As far as the goods/services breakdown, the goods-producing sector lost 29,000 jobs, leaving services to shoulder the entire burden of the increase, and then some.
Leisure and hospitality hiring was 31,000, professional services 57,000 and education 38,000. Trade, transportation and utilities was the biggest gainer, with 147,000 positions added.
“We are continuing to see steady job gains,” chief economist Nela Richardson said. “While job stayers saw a pay increase, annual pay growth for job changers in September is down from August.”
That latter bit is good news. The disparity in pay growth between job “stayers” and “switchers” (in favor of switchers) was widely blamed for driving wage growth higher, thereby increasing the risk of a wage-price spiral.
Still, annual pay growth for job changers was nearly double that for those who remained in their current position last month. Annual pay for switchers rose 15.7% in September according to ADP’s data, versus a 7.8% increase for stayers. That points to more churn.
The deceleration in annual pay growth for switchers (from 16.2% in August to 15.7% in September) counted as the largest in three years of data. Again, that’s incrementally good news, but it’s very hard to assign much weight to these numbers given market participants’ limited experience with the datasets.
Richardson sounded somewhat cautious, describing the current state of affairs as a kind of transition. “We’re in an interim period where we’re going to continue to see steady job gains,” she remarked. “Employer demand remains robust and the supply of workers is improving — for now.”
Bottom line: This was a non-event for market participants.