US companies add 162,000 jobsComment on this story
US companies added 162,000 jobs in September, more than economists expected but still pointing to slow improvement in the labor market, data from a payrolls processor showed on Wednesday.
Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 143,000 jobs.
The ADP figures come ahead of the government's much more comprehensive labor market report for September due on Friday, which includes both public and private sector employment.
That report is expected to show job growth improved slightly, with employers adding 113,000 jobs. Private-sector payrolls are seen rising by 130,000.
“This is consistent with a moderate pace of job growth and we still haven't made much headway with the losses during the downturn,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
“We would like to see growth on the order of 200,000 to 250,000.”
US stock index futures added to gains immediately after the data, while the dollar edged higher against the yen.
Last month the Federal Reserve launched an aggressive new plan to bolster the economy, saying it will buy $40 billion in mortgage-backed securities per month until the outlook for the job market substantially improves and as long as inflation remains contained.
The economy grew at just 1.3 percent in the second quarter and economists believe the recovery will remain sluggish, though it should avoid another contraction.
Analysts often refer to the ADP report to fine-tune their expectations for Friday's Labor Department payrolls numbers, though it is not always accurate in predicting the outcome.
In 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.
Small businesses - firms with fewer than 50 workers - added half of the jobs in September, according to ADP, with 81,000 new workers. Large companies with 500 or more workers added 17,000 jobs, while companies in the middle created 64,000 jobs.
The increase in private payrolls in August was revised down to 189,000 from the previously reported 201,000. July's rise was also revised down, to 156,000 from 173,000.
Separate data showed demand for mortgage refinancing surged more than 19 percent last week as interest rates tumbled to new record lows in the wake of the Fed's actions.
More people were also looking to buy a home, with purchase applications rising nearly 4 percent. - Reuters