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Private sector hiring in September showed signs of resilience, with companies adding 143,000 jobs according to a report from payrolls processing firm ADP. This marked an improvement from the previous month’s figure of 103,000 and surpassed economists’ expectations of 128,000 new jobs.
Despite the increase in hiring, wage growth showed a slight decline. The 12-month gain for employees staying in their current positions dipped to 4.7%, while job switchers saw a decrease to 6.6%, down 0.7 percentage points from August.
Various industries saw job gains, with leisure and hospitality leading the way with 34,000 new jobs, followed by construction (26,000), education and health services (24,000), professional and business services (20,000), and other services (17,000). The information services sector was the only one to experience a decline, shedding 10,000 jobs.
The majority of job growth came from service providers, adding 101,000 jobs, while goods producers contributed the rest. Companies with more than 50 employees accounted for all the growth, while small firms with fewer than 20 workers saw a loss of 13,000 jobs.
The ADP report precedes the official Labor Department’s nonfarm payrolls report, which is expected to show a growth of 150,000 jobs. Federal Reserve officials are closely monitoring the labor market as they consider future monetary policy decisions. Fed Chair Jerome Powell described the labor market as “solid” but acknowledged a cooling trend over the past year.
The Fed is anticipated to implement further rate cuts following a half percentage point reduction in September, with potential cuts in November and December. Market expectations currently suggest a quarter-point cut in November followed by a half-point cut in December. Powell hinted at consecutive quarter-point adjustments as the likely scenario, emphasizing the importance of data-driven decision-making by policymakers.
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Lucas Bennett, completed his Finance degree at Bocconi University in Italy in 2018. He is highly skilled in corporate finance and risk management, beginning his career at a hedge fund in Milan. Lucas expertise extends to consulting for leading European firms, particularly within the energy markets sector. His analytical skills and strategic mindset have made him a sought-after consultant, and he continues to explore new opportunities within the financial services industry across Europe.