WASHINGTON: Hiring by US private employers slowed further in September, suggesting that trade tensions, which have pressured manufacturing, could be spilling over to the labour market.
The ADP National Employment Report on Wednesday also showed private payrolls growth in August was not as strong as previously estimated, and said “businesses have turned more cautious in their hiring,” with small enterprises becoming “especially hesitant.”
It came on the heels of a survey on Tuesday showing manufacturing activity tumbled to a more than 10-year low in September. The reports added to cooling consumer spending in suggesting that the economy was losing momentum, though a recession is probably not on the horizon.
The economy’s darkening outlook was also underscored by another report on Wednesday showing a measure of current business conditions in New York City dropped to forty months low in September.
The longest economic expansion on record, now in its 11th year, is losing ground with the blame largely put on a 15-month trade war between the United States and China, which has eroded business confidence.
Slowing job growth is a concern as it could curb consumer spending, which has been the economy’s main growth engine.
Private employers added 135,000 jobs in September, the ADP National Employment report showed. Data for August was revised downward to show private payrolls increasing by 157,000 jobs instead of the previously reported 195,000 positions.
“We continue to believe that the underlying trend in job growth has slowed lately but that it remains decent,” said Daniel Silver, an economist at JPMorgan in New York.
Economists polled by Reuters had forecast private employment rising by 140,000 jobs in September.
The dollar was little changed against a basket of currencies, while US Treasury prices rose. Stocks on Wall Street dropped to one-month lows.
The ADP figures come ahead of the Labour Department’s more comprehensive nonfarm payrolls report due out on Friday, which includes both public- and private-sector employment.
The ADP report, which is jointly developed with Moody’s Analytics, has a poor record predicting the private payrolls component of the government’s employment report. However, last month’s job gains fit in with economists’ expectations for moderate nonfarm payrolls growth in September.
Some analysts believe a weaker employment report is likely.
“I believe that Friday’s nonfarm payrolls will come in weaker than forecast,” said Kevin Giddis, chief fixed income strategist at Raymond James in Memphis, Tennessee. “In my opinion, a number below 100,000 is likely more probable. It just has that feeling.”
According to a Reuters survey of economists, nonfarm payrolls probably increased by 145,000 jobs in September, after rising 130,000 in August. Job gains have averaged 158,000 per month this year, above the roughly 100,000 needed each month to keep up with growth in the working age population. — Reuters
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