Job creation
Actual: 90,000
Previous: 36,000 (August, revised down from 38,000)
First rebound after three months of slowdown
Base pay
Actual: +3.2% y/y (all workers)
Job-stayers: +3.0%, job-changers: +4.8%
Gross pay
Actual: +4.7% y/y (all workers)
Job-stayers: +4.4%, job-changers: +7.3%
The real signal, a clear rebound after three months of weakness
Nela Richardson (ADP chief economist) explicitly calls it a "strong report," hiring rebounding for the first time since May
Sharp contrast with the string of weak prints already documented in this series (38,000 in August, weakest since January), this rebound breaks the gradual US labor market slowdown trend
Sector detail, broad base but two weak spots
Education and health care: +55,000, the main driver, consistent with the pattern already identified as the near-sole growth engine in the August report
Leisure and hospitality: +22,000, second contributor
Goods: +31,000, manufacturing back in positive territory (+17,000) after the prior month's decline
Financial activities: -16,000, professional services: -11,000, the only two sectors net negative
Geographic breakdown
Northeast leading: +56,000, driven by the Mid-Atlantic (+47,000)
West: +17,000, driven by the Mountain region (+18,000) despite a flat Pacific
Midwest weakest: +5,000
Firm size, mid-sized businesses driving the recovery
Medium firms (50-499 employees): +54,000, largest contribution
Large firms (500+): +14,000, a contrast with August where they carried most of the gains
Methodological change worth noting
As of this release, the report incorporates Q1 QCEW data published by the BLS on August 28
This methodology shift may affect direct comparability with prior months, worth keeping in mind
Consistency with this series' narrative
This print lands after weeks of tension between the hawkish camp (Warsh, PPI +0.4%, core CPI +0.3% surprising to the upside) and the dovish camp (Waller, rising claims, weak August ADP)
A clear employment rebound combined with stable wage inflation (no acceleration, 3.2% same as the prior month) is more of a goldilocks setup, growth picking back up without wage overheating
But in the current context, with the Fed having already hiked and oil rising again after the rejected Iran proposal, this print could reinforce the hawkish argument rather than ease it
Implications
DXY: likely bullish bias, this employment rebound weakens the dovish argument that relied on a fragile labor market, consistent with the Fed pricing already documented this week (37bp expected by year-end, 71% odds of an October hike)
This print precedes Friday's official NFP, already flagged in the week's calendar as a major catalyst, ADP has an imperfect correlation with NFP but this rebound could skew expectations higher
Wednesday's PCE remains the real test for the Fed's trajectory, but this employment print adds another argument for the camp calling for a "timelier" return to the inflation target
Point of caution
One month of rebound after three months of slowdown isn't enough to establish a new trend, caution remains warranted ahead of Friday's NFP, still the official reference
The downward revision to August (38,000 to 36,000) is a reminder these figures are subject to change, September's final read could also shift
Stable wage growth (no acceleration despite the employment rebound) is the most reassuring point for the Fed, worth watching if this dynamic holds in coming months