Payroll firm ADP reported Wednesday that the economy gained just 166k jobs in September, far below economists’ expectations of a 180k gain. ADP also revised down its estimate of August job gains from over 170k to just 159k.
Because of the government shutdown, the Labor Department will not report its estimate of non-farm payrolls on Friday. As a result, the ADP report will be the only gauge of the labor market available in the near-term. The ADP report only surveys private sector employment, so its numbers often diverge from the Labor Department report. The overall trends, however, tend to be consistent.
The ADP report suggests a further cooling in hiring. The top-line number was well below expectations and the downward revision in August job gains indicate an economy stuck in a holding pattern. The economy needs to gain around 200k jobs a month to keep pace with population growth.
As ObamaCare takes root in the nation’s economy, the monthly jobs data will become increasingly important as it may indicate signs of the impact of the health care law on the economy. The largest jobs growth last month was in firms that employed fewer than 50 employees, the threshold that triggers ObamaCare. If that trend continues, it will be a sign that ObamaCare is reshaping the nation’s labor market.