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Dow Jones NewsOct 1, 12:52 PM UTC
Employers Unexpectedly Shed Jobs in September, ADP Report Shows
By Ed Frankl
U.S. private-sector employment unexpectedly fell in September, according to a monthly report, fueling greater concerns about a weaker labor market.
Private employers shed 32,000 jobs last month, the ADP National Employment Report said Wednesday, contrasting sharply with the rise of 45,000 jobs expected by economists polled by The Wall Street Journal ahead of the release. August's data was also downwardly revised to a loss of 3,000 jobs, having previously been reported as a 54,000 increase.
Markets and economists are expected to pay more attention than usual to this month's ADP data, which is based on weekly payroll data of more than 26 million private-sector employees.
The federal government shutdown puts in doubt the publication of the official monthly jobs report by the Bureau of Labor Statistics due this Friday, alongside other economic indicators that gauge the condition of the U.S. economy such as inflation. Economists had expected a 51,000 increase in jobs, from the 22,000 reported for August. However, the ADP report is frequently revised and often doesn't correlate closely with the BLS data.
It comes amid high scrutiny of the labor market, after the Federal Reserve cut interest rates last month owing to worries about a weakening employment, despite continued uneasiness over rising inflation.
The fall in employment was driven by the services-providing sector, where 28,000 jobs were lost, while the goods-producing sector shed 3,000 jobs, the ADP report said. Small businesses took on the largest share of job cuts, it added. An additional annual benchmarking also resulted in a reduction of 43,000 jobs in September compared to pre-benchmarked data, ADP said.
"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 Nela Richardson, chief economist at ADP.
Separately, President Trump moved overnight to withdraw his nominee E.J. Antoni to lead the BLS. The nomination came after Trump fired the former chief Erika McEntarfer at the start of August, when he claimed without evidence that July's weak jobs report was rigged.
In the last data release before the shutdown, BLS job-openings and labor-turnover data on Tuesday showed hiring and layoffs were little changed in August, easing some fears of a fast downturn in employment in the U.S. though retaining the view that the labor market is stagnating.
Meanwhile, households are finding little to get optimistic over job availability amid a slowing economy. Consumer confidence declined last month, The Conference Board said this week, with the share of consumers viewing jobs as plentiful falling to a multiyear low.
Taken together, the job-openings and sentiment data will maintain the pressure on the Federal Reserve to cut interest rates, despite rising inflation and some stronger recent activity data, Pantheon Macroeconomics economists Samuel Tombs and Oliver Allen wrote in a note to clients ahead of the ADP data release.
"The big picture remains that hiring already is extremely weak," they said.
Fed Vice Chair Philip Jefferson said at a conference in Finland Tuesday that the labor market is softening and could face "stress" if not supported.
Write to Ed Frankl at edward.frankl@wsj.com
(END) Dow Jones Newswires
October 01, 2025 08:52 ET (12:52 GMT)
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