U.S. companies add jobs in September, service sector expands
By Leah Schnurr
NEW YORK (Reuters) - U.S. companies added more jobs than expected in September, while activity in the vast services sector picked up, suggesting the economy remained on track for modest growth.
The ADP National Employment Report showed private employers added 162,000 jobs in September, more than economists expected, but fewer than the 189,000 hired in August.
Separate data from the Institute for Supply Management showed that new orders helped growth in the service sector to pick up to 55.1 in September, the best pace since March, from 53.7 a month earlier.
"It looks more like things are heading in the right direction. It is this new reality - we don't have robust growth, we just have very moderate growth," said William Larkin, fixed income portfolio manager at Cabot Money Management in Salem, Massachusetts.
The ADP report precedes the U.S. Labor Department's more comprehensive employment report due on Friday. That report includes both public and private sector employment and is expected to show job growth improved slightly last month.
Analysts often refer to the ADP report to fine-tune forecasts for the Labor Department's payrolls numbers, though the two reports may not always be in sync.
Over the past six months, the ADP report has exceeded the government's private payrolls numbers by an average of just over 50,000 according to Barclays. August's initial figures from ADP overshot by 98,000.
Some economists said Wednesday's data did not alter their forecasts, given the recent divergence. Continued...