Wednesday, October 2, 2013

ADP Employment Weaker than Expectations

The private sector added 166k jobs in September according to ADP’s National Employment Report. September’s growth was in line with gains from the previous two months, but fell short of estimates, which called for a 180k increase. September’s ADP report is particularly important, as we are unlikely to get the BLS’s employment data on time due to the government shutdown.

September’s growth is slightly higher than the previous two months, but only because of downward revisions. The 176k jobs initially reported in August translated to 169k jobs as reported by the BLS.

Due to the government shutdown the BLS will likely be delayed in releasing its monthly Employment Situation report. The Federal Reserve relies heavily on this report to gauge labor market health when formulating its policy. The weak ADP report supports the Federal Reserve’s recent decision not to taper off purchases from its QE3 program.

The service sector continues to drive private sector job growth, adding 147k jobs in September. The goods producing sector continued to make gains, adding 19k jobs.

Read ADP's full report.

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