ADP, the payroll processing group, will publish its reading on private sector hiring over the month of September Wednesday as investors remain keenly-focused on developments in the labor market amid soaring bond yields and renewed inflation concerns.
ADP’s National Employment Report, which has had mixed success in forecasting jobs gains for the Labor Department’s official jobs report, is expected to show that 153,000 new private sector positions were created last month, down from the 177,000 tally recorded in August and the smallest increase since March.
Wage readings for both new hires and job leavers, however, will likely be the focus of the report following data from the Bureau of Labor Statistics yesterday showing a surprise surge in open positions over the month of August, which rose to 9.6 million and triggered another sharp sell-off in Treasury bonds linked to inflation fears.
“The surprise increase in job openings comes at an unwelcome time where markets are hoping for data that eases the Fed’s inflation concerns,” said BMO Wealth Management’s CIO Yung-Yu Ma. “It’s a classic good news is bad news because the potential impact of higher interest rates on both the economy and markets is becoming concerning as the yield on the 10-year Treasury Note continues to march higher.”
Last week, the BLS’s weekly report showed that just 204,000 people filed for new benefit applications for the week ended Sept. 23, compared with the eight-month low 202,000 reported over the prior period. That was the lowest since early January, a figure that stoked inflation concern and, in part, triggered the ongoing risk in Treasury yields.
Last month, the ADP release showed a year-on-year increase of 5.9% for those remaining in their positions and 9.5% for those seeking a new role.
Both readings were the slowest in nearly two years and followed last month’s report that showed pay gains for job-switchers slowed to 10.2% while those remaining in the same role saw gains of 6.2%.
The BLS will publish its official September non-farm payroll report on Friday, with economists looking for a headline gain of 160,000 new jobs, and modest uptick in average hourly earnings from August levels.
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