US companies added more jobs than expected in September, with the private sector hiring 568,000 workers for the month, according to a Wednesday report published from payroll processing firm ADP.
The gain topped the 425,000 new jobs that were expected to be added by economists surveyed by Dow Jones and came in ahead of August’s downwardly revised report that showed 340,000 new jobs.
“The labor market recovery continues to make progress despite a marked slowdown from the 748,000-job pace in the second quarter,” ADP chief economist Nela Richardson said in a statement.
“Current bottlenecks in hiring should fade as the health conditions tied to the COVID-19 variant continue to improve, setting the stage for solid job gains in the coming months,” she added.
Encouragingly, the leisure and hospitality sector — the industry hardest hit by the pandemic and subsequent government restrictions — saw the most jobs added last month.
The sector added 226,000 new jobs in September, ADP reported, more than the 201,000 jobs the sector added in the month prior.
However, the industry is still suffering through a labor shortage holding back establishments like bars and restaurants, data indicates.
The industry, which also includes hotels, reported its August unemployment rate remained at 9.1 percent, way higher than the national rate of 5.2 percent, according to data from the Labor Department, which will publish its September update on Friday.
“Leisure and hospitality remains one of the biggest beneficiaries to the recovery, yet hiring is still heavily impacted by the trajectory of the pandemic, especially for small firms,” Richardson said.
But the impressive job creation in leisure and hospitality appears to be driven by major chains and not smaller businesses, according to ADP’s report.
Companies with more than 1,000 employees led hiring, according to the ADP report, picking up 354,000 new hires while firms with fewer than 50 workers added just 63,000 jobs.
The education and health services sector added the next-most jobs, with 66,000, and professional and business services added 61,000.
Trade, transportation and utilities combined picked up 54,000 new jobs, a huge increase from the 18,000 new jobs added in August, according to the report.
ADP’s report comes ahead of Friday’s nonfarm payrolls report, which is expected to show 500,000 new jobs after August’s disappointing report of just 235,000 jobs added.