US payrolls added 568,000 jobs last month – the most since June – as leisure and hospitality boom and hiring challenges ease with more Americans returning to work
- ADP report showed private payrolls increased by 568,000 jobs in September
- Leisure and hospitality businesses added a whopping 226,000 jobs
- It comes after federal unemployment bonuses expired in early September
Private payrolls rose last month at the fastest rate since June, in a signal that more Americans are returning to work.
The ADP National Employment Report showed private payrolls increased by 568,000 jobs in September. Economists polled by Reuters had forecast private payrolls would increase by 428,000 jobs.
The service sector saw the strongest gains, with leisure and hospitality businesses adding a whopping 226,000 jobs after months of struggling to find willing workers.
The hiring boom followed the expiration of federal supplemental unemployment benefits in the first week of September, which many business owners had blamed for discouraging people from seeking work.
More schools have now also reopened, easing the childcare concerns that kept many parents out of the workforce.
The ADP National Employment Report showed private payrolls increased by 568,000 jobs in September
‘In short, it looks like the gain in employment will qualify as ‘decent’, which is the threshold Fed Chair Jerome Powell has suggested to push ahead with a QE tapering announcement at the late-November meeting,’ said Paul Ashworth, chief U.S. economist at Capital Economics.
The numbers come ahead of the more comprehensive non-farm payrolls data on Friday, which is expected to cement the case for the Federal Reserve’s slowing of asset purchases.
While the economy has added millions of jobs this year as vaccines allow businesses to return to normal operations, the fast-spreading Delta variant of the virus has caused rehiring to waver in recent months.
The private hiring figures could foretell a strong jobs report, but Rubeela Farooqi of High Frequency Economics warned ‘ADP is far from consistent in predicting changes in the (government) payrolls data given differences in methodologies.’
Big businesses added the most positions at 390,000, while medium-sized enterprises hired 115,000 and small businesses made up the balance.
pedestrian walks by a now hiring sign at a Lamps Plus store on September 16, 2021 in San Francisco, California
The Dow recovered from early losses Wednesday. The market turned around after Senator Mitch McConnell offered Democrats a short-term extension of the debt ceiling
The service sector was the overall driver of the gains, with 466,000 jobs added versus 102,000 in goods-producing industries.
Leisure and hospitality added 226,000 jobs, the most of any category, while professional and business services and education and health services both added upwards of 60,000.
Stocks sank on Wednesday morning in reaction to the positive jobs news, which investors took as a sign that the Fed would move forward with its plan to reduce massive monthly bond purchases.
Major indexes recovered from early losses after the market turned around after Senator Mitch McConnell offered Democrats a short-term extension of the debt ceiling, relieving some of the uncertainty over a possible government shutdown.
The S&P 500 rose 0.4 percent and the Dow Jones Industrial Average gained 0.3 percent while the Nasdaq Composite closed 0.5 percent higher.
Energy prices retreated after a strong rally that contributed to renewed inflation fears among investors.