Private sector jobs rose by 90,000 in September, better than expected, ADP reports

• Education and health services led job creation with 55,000 new hires, while financial activities (-16,000) and professional and business services (-11,000) reported losses
• Annual base pay rose 3.2% year-over-year while gross pay accelerated 4.7%, indicating solid wage growth alongside employment gains
• The report precedes Friday's official BLS nonfarm payrolls data, which economists expect to show 84,000 jobs added with unemployment holding at 4.1%

Summary: U.S. Private Sector Job Growth Rebounds in September

Key Figures:

U.S. private sector employment increased by 90,000 jobs in September, according to ADP's latest report. This marks a significant improvement from August's downwardly revised 36,000 and exceeded the Wall Street consensus estimate of 68,000.

Sector Performance:

Job creation showed balanced growth across sectors. Service providers added 59,000 positions while goods producers contributed 31,000. Education and health services led hiring with 55,000 new jobs, followed by leisure and hospitality (22,000), manufacturing (17,000), and construction (15,000). However, some sectors experienced losses, including financial activities (-16,000), professional and business services (-11,000), and natural resources and mining (-1,000).

Wage Growth:

Base pay increased 3.2% year-over-year, while gross pay accelerated 4.7%, indicating solid wage growth momentum.

Geographic and Company Size Trends:

The Northeast region dominated employment gains with 56,000 new positions. Mid-sized companies (50-499 workers) accounted for 54,000 jobs added.

Market Implications:

ADP Chief Economist Nela Richardson characterized the report as "strong," noting the rebound after a three-month slowdown. The data supports Federal Reserve officials' assessment that the labor market remains sound following 2025's growth concerns. However, policymakers are now more focused on persistent inflation, which prompted a quarter-point rate increase in September.

Looking Ahead:

The report precedes Friday's Bureau of Labor Statistics nonfarm payrolls release, where economists expect 84,000 jobs added (down from August's 162,000) with unemployment holding at 4.1%.