Private sector employment decreased by 32,000 jobs in September 2025, with annual pay growth reaching 4.5 percent for job-stayers, according to the ADP National Employment Report produced in collaboration with the Stanford Digital Economy Lab. This decline marks the first private payroll drop of the year, reflecting cautious hiring amid ongoing labor market challenges.
The ADP National Employment Report, derived from anonymized payroll data of over 26 million U.S. private-sector employees, indicates a slowdown in job creation. Employers cut jobs across various industries, with professional and business services down 13,000, leisure and hospitality down 19,000, and other services down 16,000. Gains were limited to education and health services at 33,000, natural resources and mining up 4,000, and information up 3,000. Small businesses bore the brunt, with those employing 1-49 workers losing 40,000 positions, while large firms (500+ employees) added 33,000.
ADP's preliminary rebenchmarking, based on 2024 Quarterly Census of Employment and Wages data, adjusted September's figures downward by 43,000 jobs compared to prior estimates. This process also revised August's job gains to a loss of 3,000. The report underscores persistent caution in hiring despite earlier economic growth, with full benchmarking scheduled for February 2026. Pay Insights from ADP captures nearly 14.8 million pay observations monthly, providing a high-frequency view of wage trends in the private labor market.
"Despite the strong economic growth we saw in the second quarter, this month's release further validates what we've been seeing in the labor market, that U.S. employers have been cautious with hiring," said Dr. Nela Richardson, chief economist, ADP.
The September ADP report signals weakening private sector momentum, with job losses highlighting employer hesitancy amid economic uncertainties. View full details and interactive charts at www.adpemploymentreport.com. The next report releases on November 5, 2025.
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