Business

US Private Payrolls Accelerate in September; Many Challenges Loom

WASHINGTON—U.S. private employers stepped up hiring in September, but diminishing government financial assistance and a resurgence in new COVID-19 cases in some parts of the country could slow the labor markets recovery from the pandemic.

Other data on Wednesday confirmed that the economy suffered its sharpest contraction in at least 73 years in the second quarter because of the disruptions from the coronavirus. Record growth is predicted in the third quarter, buoyed by fiscal stimulus and the resumption of many business operations.

But without another rescue package, rising coronavirus infections, and political uncertainty that could extend beyond the Nov. 3 presidential election, gross domestic product estimates for the fourth quarter are being slashed.

“With economic momentum cooling, fiscal stimulus expiring, flu season approaching and election uncertainty rising, the main question is how strong the labor market will be going into the fourth quarter,” said Gregory Daco, chief U.S. economist at Oxford Economics in New York.

Private payrolls increased by 749,000 jobs this month after rising 481,000 in August, the ADP National Employment Report showed. Economists polled by Reuters had forecast private payrolls would rise by 650,000 in September. Employment gains were spread across all industries and company size.

Manufacturing payrolls increased by 130,000 jobs and employment at construction sites rose 60,000. Hiring in the services industries advanced 552,000, with trade, transportation, and utilities leading the gains.

The ADP report is jointly developed with Moodys Analytics. Though it has fallen short of the governments private payrolls count since May because of methodology differences, it is still watched for clues on the labor markets health.

The ADP report is based on active and paid employees on company payrolls. The Labor Departments Bureau of Labor Statistics (BLS) counts workers as employed if they received a paycheck during the week that includes the 12th of the month.

When businesses were shuttered in mid-March, millions of workers were either laid off or furloughed. Economists say the return of furloughed workers when most businesses reopened in May boosted the payroll numbers reported by the government.

Epoch Times Photo
People wait in line for help with unemployment benefits at the One-Stop Career Center in Las Vegas, Nev., on March 17, 2020. (John Locher/AP Photo)

New weekly applications for jobless aid have stalled at higher levels after dropping below 1 million in August as the government changed the way it strips seasonal fluctuations from the data. Data from Homebase, a payroll scheduling and tracking company, showed fewer employees at work in September relative to August.

New daily COVID-19 cases started spiking last week for the first time in eight weeks. Infections are expected to rise in the fall, which economists believe will lead to some restrictions being imposed on businesses in the services sector.

Stocks on Wall Street were higher. The dollar declined against a basket of currencies. U.S. Treasury prices fell.

Easy Gains Over

“The big gains from business re-openings are fading,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. “Job growth will slow through the rest of 2020 and in 2021.”

The government is scheduled to publish its closely followed employment report, which includes public workers, on Friday.

According to a Reuters survey of economists, private payrolls probably increased by 850,000 jobs in September after rising 1.027 million in August.

With government employment expected to be held back by the departure of some temporary workers hired for the 2020 Census and coronavirus-related budget challenges at state and local governments, nonfarm payrolls are forecast advancing by 850,000 in September after increasing 1.371 million in August.

Department of Labor
Department of Labor
Visitors to the New York State Department of Labor are turned away at the door by personnel, due to closures over CCP virus concerns in New York CiRead More – Source