The number of workers hired by US private employers was stronger than expected in September after falling to a three-and-a-half-year low the previous month.
Private payrolls rose by 143,000 last month, up from an upwardly revised 103,000 in August, according to data from payroll processor ADP. Economists had expected a reading of 124,000.
Wednesday’s total serves as a precursor to the all-important nonfarm payrolls report later in the week. Investors will be watching the data closely for signs about the health of US labor demand, which could influence how the Federal Reserve approaches further potential rate cuts this year.
Last month, the Fed cut interest rates by half a percentage point, a move officials later argued was motivated by a desire to boost labor demand at a time of easing price pressures.
On Monday, Fed Chairman Jerome Powell signaled that the Fed would likely opt for more traditional rate cuts of a quarter of a point going forward, but stressed that the future path of borrowing costs is not on a predetermined path.
Powell also said the Federal Open Market Committee, which sets interest rates, is in “no rush to cut rates quickly.”
He defended last month’s outsized tapering as a reflection of the FOMC’s “increasing confidence that, with appropriate adjustments to our policy stance, labor market strength can be sustained in an environment of modest economic growth and inflation moving steadily toward 2% ».
On Tuesday, U.S. job openings unexpectedly rose slightly in August, possibly suggesting some resilience to cooling labor demand in the third quarter.
The closely watched Job Openings and Labor Flow Survey showed that available jobs, a proxy for labor demand, rose to 8.040 million on the final business day in August, up from an upwardly revised total of 7.711 million in July. . Economists had expected the so-called JOLTS report to fall marginally to 7.640 million.
In July, that number fell to its lowest point in three and a half years, which was seen as a possible sign that the US labor market is losing momentum – albeit in a smooth way.
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Reference;
Kanowsky, S. (2024) US private employers hire more workers than expected in September – ADP By Investing.com, Investing.com. Investing.com. Available at: https://www.investing.com/news/economic-indicators/us-private-employers-hire-more-workers-than-expected-in-september–adp-3644987 (Accessed: 2 October 2024).
