ADP Jobs Report Slides — and Revisions Make It Worse

Not personalized financial advice - your money, your choice

-32,000. That’s the number of private-sector jobs that vanished in September, according to ADP. 

To put that in perspective, it’s roughly the same number as the average student loan balance for a 25-34-year-old. In other words, both the job market and young adults’ net worth are… under the sea.

And, just when you thought it couldn’t get messier, ADP revised its job numbers from the August data release of +54,000 jobs to -3,000 jobs. So, not only are we losing jobs now, but we apparently lost them the prior month too - we just didn't know it yet.

Normally, we’d wait for the Bureau of Labor Statistics (BLS) to step in with its own, more comprehensive, jobs report, BUT we’re currently in the middle of a government shutdown.

This means the BLS isn’t releasing data at the same cadence - the people who normally compile the jobs report are among the roughly 400,000 federal employees now furloughed without pay. Until Congress passes a new spending bill, the best data we’ve got on employment is ADP’s, which tends to be a little more jittery and less reliable than the official numbers.

Without the BLS job report, the Challenger Jobs Cuts report is the other main report we can look at for another clue as to the state of the labor market. This report didn’t bring much comfort - U.S. employers announced 54,000 job cuts in September, following 89,000 in August. That's a 25.8% drop (good), but cuts are cuts.

To borrow from the childhood of many Americans, the labor market is shrinking faster than a Shrinky Dink in a toaster oven. 

So far this year, the government leads all industries in announced layoffs - nearly 300,000 positions, according to Challenger, Gray & Christmas. Roughly 289,00 of those were due to Department of Government Efficiency (DOGE) cuts. Tech companies are in second place with around 108,000 layoffs.

If you zoom out, there is a bright spot, however. Job cuts are trending down, especially compared to Q1 of this year, when companies were slashing head-counts at nearly twice today’s pace.

Still, it’s not exactly boom-time. Hiring plans are at their lightest levels since 2009. This means if you’ve got a job, it’s probably a good time to be a team player and to contribute as much as you can.The labor market’s wobble doesn’t necessarily mean that we’re cooked, but it does mean that we’re flying blind for now. Until the BLS comes back online, all we can do is hold tight, watch the ADP and Challenger reports, and try not to panic when we see headlines. 

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