[US] Private payrolls rose by 568,000 in September despite Delta

Companies shook off concerns about the COVID-19 Delta variant and hired at a faster-than-expected pace in September, according to an October 6 report from ADP, CNBC reports.

Private jobs rose by 568,000 for the month; better than the Dow Jones economists’ estimate of 425,000 and ahead of the downwardly revised 340,000 reading in August. The initial August report showed growth of 374,000.

The data was released amidst a climate of concern over how fast hiring could grow in light of ongoing fears over the Delta spread and signs that the brisk economic growth of 2021 was beginning to slow towards autumn. The slowing rate of growth was particularly affected by supply chain bottlenecks that have driven inflation sharply higher.

“The labor market recovery continues to make progress despite a marked slowdown from the 748,000-job pace in the second quarter,” ADP Chief Economist Nela Richardson said.

According to Goldman Sachs, payroll growth also may have been helped by expiring enhanced unemployment benefits.

Stock market futures were reportedly off their lows the morning after the data release, while government bond yields moved higher.

Critical to this was leisure and hospitality sector-led job creation with 226,000 hires. This sector was hit hardest by the COVID-19 pandemic and has struggled to regain traction because it is the most responsive to the economic reopening. Establishments continue struggling with labour shortages despite nearly 2 million job openings.

The industry - which includes bars, restaurants, hotels etc. - has about 800,000 more workers employed than a year ago but its unemployment rate remains at 9.1 per cent, compared with the national rate of 5.2 per cent, according to Labor Department data up to August.

Much of that hiring appears to have come through hotels and larger chains, as companies with 500 and more employees led job creation with 390,000. Businesses with fewer than 50 workers added just 63,000 jobs, while medium-sized firms contributed 115,000.

The faster pace of job creation comes alongside COVID-19 cases dropping nationally, despite some localised hot spots. The total cases averaged 97,909 on a seven-day rolling basis until Monday, compared with 160,284 a month ago, according to the CDC.

Services continued to dominate, with 466,000 new hires; helped by education and health services with 66,000, professional and business services with 61,000 and 54,000 from trade, transportation and utilities.

Additionally, goods producers posted a solid 102,000 gain. Manufacturing contributed 49,000 and construction added 46,000.

The ADP report serves as a precursor for the Labor Department’s more widely watched nonfarm payrolls which will be released later today. The Dow Jones estimate from economists is for 500,000 new jobs after August’s letdown of just 235,000. However, the two reports can substantially differ. Until August, the ADP count of private payrolls had undershot the government’s tally by an average of 37,000 per month.

Source: CNBC

Companies shook off concerns about the COVID-19 Delta variant and hired at a faster-than-expected pace in September, according to an October 6 report from ADP, CNBC reports.

Private jobs rose by 568,000 for the month; better than the Dow Jones economists’ estimate of 425,000 and ahead of the downwardly revised 340,000 reading in August. The initial August report showed growth of 374,000.

The data was released amidst a climate of concern over how fast hiring could grow in light of ongoing fears over the Delta spread and signs that the brisk economic growth of 2021 was beginning to slow towards autumn. The slowing rate of growth was particularly affected by supply chain bottlenecks that have driven inflation sharply higher.

“The labor market recovery continues to make progress despite a marked slowdown from the 748,000-job pace in the second quarter,” ADP Chief Economist Nela Richardson said.

According to Goldman Sachs, payroll growth also may have been helped by expiring enhanced unemployment benefits.

Stock market futures were reportedly off their lows the morning after the data release, while government bond yields moved higher.

Critical to this was leisure and hospitality sector-led job creation with 226,000 hires. This sector was hit hardest by the COVID-19 pandemic and has struggled to regain traction because it is the most responsive to the economic reopening. Establishments continue struggling with labour shortages despite nearly 2 million job openings.

The industry - which includes bars, restaurants, hotels etc. - has about 800,000 more workers employed than a year ago but its unemployment rate remains at 9.1 per cent, compared with the national rate of 5.2 per cent, according to Labor Department data up to August.

Much of that hiring appears to have come through hotels and larger chains, as companies with 500 and more employees led job creation with 390,000. Businesses with fewer than 50 workers added just 63,000 jobs, while medium-sized firms contributed 115,000.

The faster pace of job creation comes alongside COVID-19 cases dropping nationally, despite some localised hot spots. The total cases averaged 97,909 on a seven-day rolling basis until Monday, compared with 160,284 a month ago, according to the CDC.

Services continued to dominate, with 466,000 new hires; helped by education and health services with 66,000, professional and business services with 61,000 and 54,000 from trade, transportation and utilities.

Additionally, goods producers posted a solid 102,000 gain. Manufacturing contributed 49,000 and construction added 46,000.

The ADP report serves as a precursor for the Labor Department’s more widely watched nonfarm payrolls which will be released later today. The Dow Jones estimate from economists is for 500,000 new jobs after August’s letdown of just 235,000. However, the two reports can substantially differ. Until August, the ADP count of private payrolls had undershot the government’s tally by an average of 37,000 per month.

Source: CNBC