U.S. Private Sector Unexpectedly Cuts 32,000 Jobs In September

(RTTNews) - Private sector employment in the U.S. unexpectedly decreased in the month of September, according to a report released by payroll processor ADP on Wednesday.

ADP said private sector employment fell by 32,000 jobs in September after dipping by a revised 3,000 jobs in August.

Economists had expected private sector employment to climb by 50,000 jobs compared to the addition of 54,000 jobs originally reported for the previous month.

"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 ADP chief economist Dr. Nela Richardson.

The unexpected decrease by private sector employment came as employment in the service-providing sector declined by 28,000 jobs and employment in the goods-producing sector edged down by 3,000 jobs.

The report also said employment at small and medium establishments fell by 40,000 jobs and 20,000 jobs, respectively. Employment at large establishments rose by 33,000 jobs.

ADP said year-over-year pay growth for job-stayers was little changed at 4.5 percent in September, while pay gains for job-changers slowed to 6.6 percent in September from 7.1 percent in August, led by leisure and hospitality and financial activities.

"The 32,000 decline in nonfarm payrolls in September underscores the reticence of businesses to increase headcount," said Matthew Martin, Senior U.S. Economist at Oxford Economics.

He added, "Given the weaker labor market data and the potential for a data fog should the government shutdown be prolonged, we will be pulling forward our forecasted December rate cut to October in the upcoming baseline."

The Labor Department had been scheduled to release its more closely watched monthly jobs report on Friday, although the data is likely to be delayed due to the U.S. government shutdown.