American companies shrank payrolls in September, confirming earlier evidence that suggested weakened demand for labor in the U.S.
Private-sector payrolls fell by 32,000 last month, according to ADP Research data released Wednesday. The median estimate in an Econoday survey of economists called for a gain of 50,000.
The prior month’s initial estimate of a 54,000 gain was revised down to a loss of 3,000 jobs.
The government’s September employment report would normally be published on Friday, the first Friday of the month. But because of the government shutdown that began at midnight, the report will be delayed. Economists were expecting the Department of Labor to say the economy added 50,000 jobs, including a gain of 60,000 in the private sector and a loss of 10,000 government jobs.
The economic data has sent a confusing message about the shape of the economy. Hiring has slowed in recent months, with the three-month average of non-farm payrolls rising just 29,000. But job openings rose to a higher-than-expected figure in data for the end of August reported this week. Economic growth apparently remains robust. The economy grew at an annualized pace of 3.8 percent in the second quarter and the Atlanta Fed’s GDPNow is currently indicating a 3.9 percent pace for the third quarter. Pending home sales surged four percent in August, an unexpectedly strong rebound.
The loss of 32,000 jobs in September and the downward revision to August suggest that the Federal Reserve has fallen behind the curve on interest rates. The Fed held rates steady until last month, despite pressure from the White House and mounting evidence that the labor market was softening.
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