US ADP employment increased by 90,000 in September, far surpassing expectations; the nonfarm payroll report will face a crucial test

According to information from Zhihui Finance APP, data released by ADP Research on Wednesday shows that US private sector employment increased by 90,000 in September, marking the largest growth in three months and exceeding market expectations. This indicates that after a brief slowdown, the labor market has accelerated again, easing concerns about an economic cooldown.

Specifically, 90,000 new jobs were added in September, far surpassing the revised 36,000 in August. Regarding market expectations, the median estimate of surveyed economists was 75,000, while the Dow Jones consensus was 68,000—both figures were significantly outperformed by the actual data. The ADP report is based on payroll data covering more than 26 million US private sector employees and is regarded as an important prelude to Friday’s nonfarm payrolls report.

From the perspective of industry structure, employment growth was broad but varied. Education and health services contributed the most, adding 55,000 jobs and accounting for over half of the total increase. Leisure and hospitality grew by 22,000, manufacturing by 17,000, and construction by 15,000—all posting steady growth. The service sector as a whole added 59,000, while goods producers contributed 31,000, showing a relatively balanced structure.

However, some industries saw layoffs. Financial activities lost 16,000 jobs, professional and business services lost 11,000, and natural resources and mining lost 1,000. Regionally, the Northeast performed particularly well, with an increase of 56,000. By company size, those with 50 to 499 employees added 54,000, indicating stronger hiring intent among medium-sized firms.

In terms of salaries, the ADP report indicates that total compensation for job changers rose 7.3% year-over-year, while wages for those who stayed grew 4.4%. Overall base wages increased 3.2% year-over-year, with total compensation growth accelerating to 4.7%. ADP Chief Economist Nela Richardson stated, “This is a strong report. After three months of slowing, job creation has rebounded and wage growth remains robust.”

This report further reinforces the recent statements of several Federal Reserve officials, indicating that after fears of a slowdown in 2025, the labor market is basically solid and approaching balance. A stable job market, coupled with resilient consumer spending, allows the Federal Reserve to focus its policies on combating persistent inflation.

Earlier in September, the Federal Reserve raised its benchmark borrowing rate by 25 basis points, the first hike since 2023. Since then, several policymakers have described the labor market as “solid and balanced,” and believe the larger policy risk at present is stubborn inflation rather than weak employment.

The market is now looking toward Friday’s government nonfarm payrolls report. This report includes public sector hiring; Wall Street consensus expects 84,000 new jobs in September, lower than the previous month’s 162,000, with the unemployment rate expected to remain at 4.1%. Some institutions expect the government report to show around 90,000 new jobs, echoing the ADP data.

Overall, the September ADP report paints a picture of a labor market stabilizing—rebounding hiring, steady wages, and sectoral divergence but overall health. Despite layoffs in financial and professional services, strong growth in education and health, leisure and hospitality, and manufacturing was enough to offset the impact. This data helps ease fears of an abrupt economic slowdown while providing support for the Federal Reserve to maintain a tightening bias against a backdrop of sticky inflation. As the nonfarm report approaches, the true resilience of the labor market will face further scrutiny.