The U.S. job market may be not be gaining a lot of steam, but it does not appear, as the third quarter starts, that a major retrenchment in payrolls has started, as the private sector added 91,000 jobs in September, payroll services form ADP (ADP) announced Wednesday.
Like August, this month's jobs report continues to show modest job creation, ADP Chief Executive Officer Gary C. Butler said in a statement. The number of jobs added to the private sector in August and September were virtually identical. Once again, the small business services sector led the way, contributing almost two-thirds of all new jobs.
Small businesses overall showed positive growth for the 22nd straight month and averaged 73,000 jobs a month for the past 12 months, he continued. Professional business services, education and healthcare, and leisure services led all other sectors in new jobs added.
In-Line With Bloomberg Consensus Estimate
A Bloomberg survey had expected private employers to add 90,000 in September after adding a revised 89,000 in August, slightly lower than the initially estimated 91,000 gain. The economy added 109,000 private sector jobs in July, 144,000 in June, and 35,000 in May.
Separately, private placement firm Challenger, Gray & Christmas said layoff announcements by U.S. employers totaled 115,730 in September, up 126 percent from August's 51,114, CNN.com reported Wednesday. That's the highest layoff total since April 2009, when there were 132,590 layoffs.
Also, for the first nine months of 2011, job cuts totaled 479,064, up 16.4 percent from 411,272 for the nine months of 2011.
According to the September ADP report, the job gains were concentrated in small/medium-sized businesses. Small businesses added 60,000 jobs, medium business added 36,000 but large businesses shed 5,000.
The services sector added 90,000 jobs; the goods producing sector added 1,000; construction sector jobs declined by 2,000, and manufacturing declined by 5,000.
Economists monitor monthly job reports because job creation is positively correlated with corporate revenue and earning gains. And, in general, as corporate earnings go, so goes the U.S. stock market.
Labor Market/Economic Analysis: File September's private sector employment report in the category of a status quo report. Even though the total was slightly above the Bloomberg consensus estimate, the total suggests private sector hiring is not revving up, but it has not collapsed either.
Further, even though the ADP private survey is not as comprehensive as the U.S. Labor Department's non-farm monthly report, (September's report will be released Friday at 8:30 a.m. EDT), it still shows that some employers are hiring incrementally, while others are shedding a few jobs. In other words, demand conditions in the economy aren't nearly strong enough for employers to commit to hiring en masse: most still want to see both consumer demand and household formation to accelerate before adding positions.