ICYMI: ADP: JOB GROWTH BEATS EXPECTATIONS, THANKS TO AMERICAN RESCUE PLAN
Companies Hired Well Over Expectations in September
Private sector job hires rose by 568,000 in September, better than the Dow Jones estimate of 425,000, according to ADP. The remarkable increase in hires is thanks in part to the American Rescue Plan, which got Americans vaccinated and back to work. Even now, despite concerns over the delta variant of COVID-19, the framework of the American Rescue Plan positioned the economy to move forward.
However, greater investment is needed to build on the economy’s momentum and bring it to full strength. Passing the Build Back Better Act would not only create millions more jobs, but also put the U.S. in position to deliver a historic boom that opens the economy for millions more workers, according to economists.
See the CNBC article below:
Companies shook off worries over the Covid delta variant and hired at a faster-than-expected pace in September, according to a report Wednesday from payroll processing firm ADP.
Private jobs rose by 568,000 for the month, better than the Dow Jones estimate from economists of 425,000 and ahead of the downwardly revised 340,000 reading in August. The initial August report showed growth of 374,000.
The data comes amid concerns about how fast hiring would grow considering ongoing fears over the delta spread and signs that the brisk economic growth of 2021 was beginning to slow heading into autumn, particularly due to supply chain bottlenecks that have driven inflation sharply higher.
“The labor market recovery continues to make progress despite a marked slowdown from the 748,000-job pace in the second quarter,” ADP Chief Economist Nela Richardson said.
Payroll growth also may have been helped by expiring enhanced unemployment benefits, according to Goldman Sachs.
Stock market futures were off their lows for the morning following the release, while government bond yields moved higher.
The critical leisure and hospitality sector led job creation with 226,000 hires. The category was hit hardest during the pandemic and has struggled to regain traction as it is the most sensitive to the economic reopening. Establishments are struggling with labor shortages despite nearly 2 million job openings.
Though the industry, which includes bars, restaurants, hotels and the like, has about 800,000 more workers employed than a year ago, its unemployment rate remains at 9.1%, compared with the national rate of 5.2%, according to Labor Department data through August.
Much of that hiring appears to have come through hotels and larger chains, as companies with 500 and more employees led job creation with 390,000. Businesses with fewer than 50 workers added just 63,000 jobs, while medium-sized firms contributed 115,000.
The faster pace of job creation comes with Covid cases on the wane nationally, despite some localized hot spots. Total U.S. cases averaged 97,909 on a seven-day rolling basis through Monday, compared with 160,284 a month ago, according to the CDC.
As usual, services dominated, with 466,000 new hires, helped by education and health services with 66,000, professional and business services with 61,000, and 54,000 from trade, transportation and utilities.
However, goods producers posted a solid 102,000 gain. Manufacturing contributed 49,000 and construction added 46,000.
The ADP report serves as a precursor for the Labor Department’s more widely watched nonfarm payrolls release Friday. The Dow Jones estimate from economists is for 500,000 new jobs after August’s letdown of just 235,000. However, the two reports can differ substantially. Through August, the ADP count of private payrolls had undershot the government’s tally by an average 37,000 per month.