US Private Sector Loses Over 30,000 Jobs In One Month

The most recent report from the Bureau of Labor Statistics states that 32,000 jobs were lost by private sector companies in the United States in September of this year. The payroll gains for August that were initially projected to be 54,000 were cut downward to 3,000.

ADP’s most recent figures do, however, have some serious disclaimers. Nela Richardson, the chief economist for ADP, said that the negative revision in August and the estimated job losses in September were largely due to an initial “rebenchmarking” of the data.

Comparing the process to pre-benchmarked statistics, 43,000 jobs were lost in September.

“In fact, though the numbers changed, the story and the narrative and the trend remain the same: Hiring momentum has slowed from the beginning of the year through September,” Richardson said.

Because the report uses data from quarterly tax filings that firms submit to their governments, it offers a more thorough read on the number of businesses, employees, and wages at the state, regional, and county levels. The QCEW is significantly behind schedule, nevertheless.

The expected employment gains for September, as calculated by ADP using aggregated and anonymized payroll data from its clients, were significantly less than the 50,000 new positions that economists had predicted.

According to ADP, last month’s decrease was driven by small private sector companies, and losses were felt across a wide range of industries, with professional and business services, leisure, and hospitality suffering some of the biggest losses. Health care companies, which have been the only source of steady job creation this year, accounted for the majority of the hiring.

ADP is still regarded as a gauge of the direction of the labor market even though its estimates rarely match the official monthly jobs figures that are announced days later and have been widely criticized by economists for their poor track record of short-term forecasting.

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And the outlook has been getting more and more dire. In addition to the job losses in the private sector, the most recent (and final) report from the BLS revealed that the US labor market has become more and more stagnant.

According to the August BLS jobs report, the economy created an estimated 22,000 new jobs, while the unemployment rate increased to 4.3%, the highest level in almost four years. Additionally, the data demonstrated that previous job increases were not only less than anticipated, but actually reversed.

Excluding the onset of the pandemic in early 2020, the hiring rate (hires as a percentage of total employment) fell in August to 3.2%, matching the lowest rate since 2013, according to the BLS’ Job Openings and Labor Turnover Survey report.

Job gains were expected to pick up in September, however. Economists’ forecasts called for a net gain of 50,000 jobs last month and that the unemployment rate would hold steady at 4.3%.