Wednesday, October 1, 2025
This morning, Automatic Data Processing ADP is out with new private-sector payrolls for September. Results are not good: -32K jobs were created in the private sector last month, way down from the +45K expected from analysts. This follows a big downward revision for August: from +54K originally posted to -3K this morning. Non-farm payroll estimates from the BLS — should we get it (which looks unlikely) is still at +51K for now.
The ratio between goods-producing and services jobs remained roughly in-line: -3K in Goods jobs last month, -28K in Services. Only large corporations (500+ employees) made gains in the private-sector labor market, +33K. Small companies (under 50 employees) lost -40K private-sector jobs last month, while medium-sized firms shed -20K.
Breakdown of Private-Sector Jobs Data
Importantly, these figures reflect the downward shift in BLS numbers from the federal government, which removed -911K jobs from the yearly tally. Without this revision, today’s headline ADP number would have been +11K. That’s still weak — aside from government employment, which stands to only get worse now that the federal government is shut down on an impasse regarding a budget resolution — and does not cover the total number of retirees from the labor force per month.
By industry, Education & Healthcare unsurprisingly led the way with +33K new private-sector jobs created. Natural Resources & Mining brought in +4K. Most of the other usual sectors noted in employment reports came with negative numbers last month: Trade/Transportation/Utilities came in -7K, Professional/Business Services -13K and Leisure & Hospitality — for years the singular jobs growth driver, particularly during the Great Reopening following the Covid pandemic — lost -19K positions in August.
A unique metric to ADP jobs data is the rate of income change between Job Stayers and Job Changers. Until fairly recently, we would see a big gap between those who found new jobs, but in the current labor market Stayers stood to make +4.5% more than a year ago, whereas Changers are up +6.6%. This is down half a percentage point from August’s +7.1%.
Pre-market futures are not enthralled with these numbers. The Dow is selling off -160 points at this hour, the S&P 500 is -30 and the Nasdaq -130 points. The small-cap Russell 2000 is down -11 points. Bond yields, especially in the 10-year, are down notably: +4.10% on the 10-year and +3.55% on the 2-year. Clearly, these weak jobs numbers are pointing toward more interest rate cuts.
This may be the last jobs numbers we see this week, now that the federal government is shut down. The U.S. Department of Labor and the U.S. Bureau of Labor Statistics (BLS), which report Weekly Jobless Claims and non-farm payrolls for the prior month, respectfully, are unlikely to report this week. (We’ve seen no attempts at negotiations between the two parties since the deadline was breached last night.) So these ADP numbers are as close as we are likely to get in understanding the level of unraveling in the recently healthy labor market.
What to Expect from the Stock Market Today
After today’s open, the final print on S&P Manufacturing PMI is expected to come out. This is expected to remain at +52.0, down a tad from the three-year high 53.0 reported in August. ISM Manufacturing should tick up slightly to +49.0% from +48.7% previously. Construction Spending for August is likely to come down to -0.2% from -0.1% the previous month. Auto sales from various auto dealers are expected to be released throughout the day.
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