By Shobhana Chandra
By Shobhana Chandra
WASHINGTON - Companies added fewer workers than projected in September, indicating the U.S. job market is struggling to gain momentum, a private report based on payrolls showed Wednesday.
The 166,000 increase in employment followed a revised 159,000 rise in August that was smaller than initially estimated, according to the ADP Research Institute in Roseland, N.J. The median forecast of 40 economists surveyed by Bloomberg called for an advance of 180,000.
Faster progress in hiring and wage growth is needed to sustain gains in consumer spending, the biggest part of the economy. Today’s figures will be the only snapshot of September employment available until an end to the first partial shutdown of the federal government in 17 years allows the Labor Department to issue its monthly payrolls report.
“The labor market is not weak but not as strong as we’d like,” said Scott Brown, chief economist for Raymond James & Associates Inc. in St. Petersburg, Fla., and the top forecaster of ADP in the past two years, according to data compiled by Bloomberg. “There’s a lack of traction. It’s a sign things have slowed down a bit in the economy.”
Estimates in the Bloomberg survey ranged from gains of 160,000 to 235,000. The prior month’s figure was revised from a previously reported increase of 176,000.
Stock-index futures fell after the report and as the government shutdown entered a second day. The contract on the Standard & Poor’s 500 Index expiring in December dropped 0.8 percent to 1,676.7 at 8:59 a.m. in New York.
Manufacturers, builders and other goods-producing industries increased headcount by 19,000. Employment in construction boosted by 16,000, while factories added 1,000 jobs, today’s report showed.
Payrolls at service providers rose by 147,000 in September, restrained by a 4,000 decrease in financial services.
“The job market appears to have softened in recent months,” Mark Zandi, chief economist at Moody’s Analytics Inc., said in a statement. Moody’s produces the figures with ADP. “Fiscal austerity has begun to take a toll on job creation” and higher interest rates “may also be doing some damage.”