Private sector employers add 89,000 new hires in September, as annual pay up 5.9%

(The Center Square) – In September, private sector employers added 89,000 jobs, as year-over-year pay rose 5.9%, according to the September ADP® National Employment Report, a collaboration with the Stanford Digital Economy Lab.

ADP revised August’s total of new hires up from 177,000 to 180,000. “We are seeing a steepening decline in jobs this month,” Nela Richardson, ADP’s chief economist, said in a statement. “Additionally, we are seeing a steady decline in wages in the past 12 months.”

September’s 5.9% annual pay growth is for the median (half above and half below) job stayers compared with 6% in August. The job stayers’ median annual pay is $57,700, according to ADP.

Meanwhile, job changers realized annual median pay gains of 9% in September versus August’s 9.7% growth. Employees change jobs for higher pay and other reasons such as employer benefits like health-care insurance.

Turning to pay growth and gender, female workers’ earnings outstripped males in all age groups: from 16-24 to, 25-34, 35-54 and 55-84, according to ADP. By state, Massachusetts, with median annual pay of $71,400 and Virginia’s $68,000 were at the top but paled to Washington DC’s annual pay rate of $96,600.

This September’s job growth was the slowest pace of growth since January 2021. Large firms of 500 employees or more drove the decline of employment, shedding 83,000 jobs. That drop eliminated August’s employment gains, according to the ADP report.

Employment changes favored small firms of 1-19 workers, with 67,000 new hires in September. Mid-size companies of 50-249 employees added 55,000 payroll jobs.

In regional employment changes, the West with 66,000 new hires topped the list of job creators. The Pacific region realized 57,000 new hires.

The Northeast added 34,000 new hires, all in the Middle Atlantic region. Midwest employers added 2,000 new jobs, while employers in the South shed 16,000 workers.

Leisure and hospitality employers led the way with 92,000 new hires in September, as financial employers hired 17,000 workers. Professional and business services shed 32,000 jobs. Trade, transportation and utilities employers recorded 13,000 job losses.

In terms of median year-over-year change in annual pay, firms with 50-249 employees led the way with 6.1% gains. Employers with 250-499 and 500 and more employees recorded 6% pay hikes, respectively.

Leisure and hospitality industry workers recorded the highest pay growth of 6.7% in September versus August’s 7%. Education and health care pay was up 6.4% in September compared with 6.6% in August.