Private payrolls plunge 32K in key September jobs report — as shutdown set to halt flow of government data

Core Insights - Private payrolls in the US unexpectedly dropped by 32,000 in September, marking the largest decline in two and a half years, which is significantly below the expected addition of 50,000 jobs [1][2][4] - This decline follows a revised decrease of 3,000 jobs in August, down from an initial estimate of a 54,000 job increase [2][5] - The potential government shutdown may delay the release of key economic data, including the Bureau of Labor Statistics' nonfarm payrolls report, which is considered more comprehensive than the ADP report [5][6] Labor Market Trends - The September job losses were somewhat offset by a 33,000 increase in education and health services, attributed to the reopening of schools and ongoing strong hiring in healthcare [11] - The leisure and hospitality sector experienced a loss of 19,000 jobs as the vacation season ended, while other sectors such as professional and business services, trade, transportation, and utilities also saw declines [12][13] - Companies with fewer than 50 employees shed 40,000 jobs, contrasting with companies that employ 500 or more, which added 33,000 jobs [13] Economic Implications - The weaker-than-expected payroll data increases the likelihood of the Federal Reserve issuing another quarter-point interest rate cut at their upcoming meeting, following a previous cut in the prior month [7][10] - Despite a strong economic growth rate of 3.8% in the second quarter, concerns over the labor market persist, with the unemployment rate remaining at 4.3% [8][10] - Wage growth has slowed, with job changers seeing a 6.6% increase in pay, the lowest in a year, while those remaining in the same role experienced a 4.5% gain [15]