ADP Jobs Report 10.01.2025

U.S. private sector jobs market weakens into the red in September. 

According to ADP, the largest payroll company with 14% of the US labor market, U.S. Private Sector Employment lost 32,000 jobs in September, making a mockery of analysts' expectations for 50.000 new jobs. Worse revisions showed a loss of 3,000 jobs in August, completely wiping out the growth of 54,000 jobs recorded in its first release.

To be fair, the revisions shouldn't be blamed purely on poor analysis, ADP also revised its methodology.

According to ADP

"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 Nela Richardson.

The revisions in payrolls were on account of ADP recalibrating its National Employment Report based on full-year 2024 results from the Quarterly Census of Employment and Wages, still without the revisions it would have been 43,000 jobs lost...so hardly any succor from changes in methodology.

According to ADP, the details were not flattering either...

In September pay trends, year-over-year pay growth for those who stayed in their current jobs was 4.5%, up from 4.4% in August. Manufacturing saw the largest pay increase, 4.7% in the month. Those who changed jobs saw a 6.6% pay increase in September, down from the 7.1% increase in August.

Who lost? Services 28,000, while manufacturing a mere 3,000, and leisure/hospitality led the trend with losses of 19,000 jobs.

Who gained? Education and health services added 33,000.

I have been harping for the past 3 months that the labor market has softened and I believe this will continue and cutting interest rates is not going to stave off the uncertainty from tariffs, which based on my primary research is holding up hiring.

Let us hope that this budget impasse comes to an end and no further workers are furloughed from an already softening economy.