ADP Reports Modest Employment Gains in September, Weak Manufacturing Job Growth

By October 3, 2012Economy

Automated Data Processing (ADP) reported that total nonfarm payrolls rose 162,000 in September, below the 189,000 workers added in August. This suggests modest growth in employment last month, and the figure was slightly above expectations, which were around 140,000. The bulk of the net new jobs came from the service sector, which added 144,000 employees on net.

Manufacturers hired just 4,000 more workers on net in September, making it the sixth consecutive month in a row of lackluster job growth for the sector. This corresponds with weaker global growth and rising anxieties about the future of the U.S. market. For the goods-producing sector as a whole (which would add construction, mining, and utilities), there was a net gain of 18,000 employees.

As with past reports, small and medium-sized establishments accounted for most of the net job gains, or 89.5 percent of them in September. In fact, large goods producers added just 1,000 workers for the month.

The ADP numbers are often looked at for clues regarding the official government employment statistics, which will be released on Friday morning. Last month, the Bureau of Labor Statistics reported disappointing jobs numbers, with 96,000 nonfarm payroll jobs added and manufacturers shedding 15,000 workers. While these figures were below the estimates provided by ADP, it did suggest inadequate job gains since the spring, which was similar.

The consensus estimate for Friday’s employment numbers is for around 120,000 new nonfarm payroll workers, with continued weakness in the manufacturing sector.

I would expect for the manufacturing job gains to be in the ballpark of what was estimated by ADP.

Chad Moutray is chief economist, National Association of Manufacturers.

Leave a Reply