ADP report shows U.S. private employers added 166,000 jobs in September
(Reuters) – U.S. private employers added a fewer-than-expected 166,000 jobs in September, according to Wednesday data from a payrolls processor, underscoring steady but still sluggish growth in the labor market.
Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 180,000 jobs. August’s private payrolls gains were revised to 159,000 from the previously reported 176,000.
“It basically says that the stimulus will continue,” said Chris Gaffney, senior market strategist, EverBank Wealth Management in St. Louis, Missouri.
“The government shutdown will be a negative impact on the U.S. economy, extending the need for additional stimulus.”
The U.S. Federal Reserve has been weighing pulling back on its $85-billion-per-month bond buying program but has so far kept up its purchase pace on worries that the economy, including the labor market, has not yet gathered enough momentum to stand on its own.
Complicating things further, this week the government shut down in the wake of demands by Congressional Republicans to undermine President Barack Obama’s signature healthcare law in exchange for agreeing to keep the government running.
Nevertheless, the government shutdown will not show up in ADP data “to any significant degree” unless the shutdown lasts through the middle of October, Mark Zandi, chief economist of Moody’s Analytics, said in a conference call with reporters. The ADP report is jointly developed with Moody’s Analytics.
Policymakers are unlikely to resolve the shutdown until stock and bond investors get “unnerved,” Zandi said.
But he noted that political uncertainty, including the kind of brinkmanship involved in the federal government shutdown, has had a “significant effect” on the U.S. economy in recent years, raising the unemployment rate by perhaps as much as 0.7 percentage point.
