Private-sector employment rose by 90,000 jobs in September, according to the ADP National Employment Report, exceeding economist forecasts and reversing a prior month’s slowdown.
The increase follows a downwardly revised gain of 36,000 jobs in August, as reported by ADP, a payroll-processing firm. Economists had projected a gain of 70,000 jobs for September. The report also showed a 3.0% year-over-year increase in base pay for job-stayers and a 4.7% rise for job-changers.
Sector and Size Breakdown
Job growth was broad-based, led by education and health services, which added 55,000 positions. Other gains included leisure and hospitality (22,000), manufacturing (17,000), and construction (15,000). Declines were reported in financial activities (-16,000), professional and business services (-11,000), and natural resources and mining (-1,000).
Medium-sized businesses—those with 50 to 499 employees—accounted for the majority of hires, adding 54,000 jobs. Small businesses (1–19 employees) contributed 23,000 jobs, while large businesses (500+ employees) added the remaining jobs.
Economic Context and Outlook
ADP Chief Economist Nela Richardson described the report as a strong rebound after a three-month slowdown. “After a three-month slowdown, job creation rebounded and pay growth remained solid,” she stated.
The report follows other labor market indicators released this week. The Bureau of Labor Statistics reported that job openings fell modestly to a five-month low of slightly above 7 million in August. Planned layoffs for September and weekly unemployment claims were scheduled for release on October 1, with the September jobs report from the BLS due on October 4.
Economists forecast that the unemployment rate will hold steady at 4.1%, while average monthly job growth for 2025 remains around 80,000, above the estimated breakeven rate of 20,000 jobs per month needed to stabilize unemployment.
The ADP data serves as a precursor to the BLS nonfarm payrolls report, with economists projecting a gain of 84,000 jobs in September, down from 162,000 in August. The unemployment rate is also expected to remain unchanged at 4.1%.
Regional and Sectoral Highlights
The Northeast region added 56,000 jobs, the largest regional gain. Service-providing industries contributed 59,000 jobs, while goods-producing industries added 31,000. The report underscores a mixed but stabilizing labor market, with policymakers at the Federal Reserve citing a mostly sound job market despite concerns over persistent inflation.
Federal Reserve officials have indicated that the greater policy risk now lies in inflation, which prompted a quarter-point rate hike in September. The labor market’s trajectory remains a key factor in monetary policy decisions moving forward.