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US private sector hires increased the most in September in three months, fueled by the hospitality and entertainment industry as the spread of Covid-19 slowed.
The US private sector payroll increased by 568,000 last month, according to a report by payroll processor ADP. It was the biggest increase since June and exceeded economists’ expectations for an increase of 428,000, according to a Reuters survey, and followed a downward revision of 340,000 jobs created in August.
The service sector, which has been hardest hit by pandemic lockdowns and has recovered in recent months thanks to vaccinations and business reopenings, created the most jobs with 466,000. hospitality accounted for 226,000 of these gains. Meanwhile, the manufacturing sector has created 102,000 jobs.
Job creation has also been led by large companies – those employing more than 500 workers – with 390,000 payrolls added last month.
Hiring cooled in the third quarter compared to the second, as coronavirus fears and childcare issues kept Americans from returning to work. “Current bottlenecks in hiring are expected to ease as health conditions related to the Covid-19 variant continue to improve, paving the way for solid job gains in the coming months. “said Nela Richardson, chief economist, ADP.
The data precedes Friday’s official report on non-farm wages, which is expected to show a pickup in hiring in September, with the US economy creating 473,000 jobs. The report is being closely watched as it could pave the way for the Federal Reserve to start scaling back its massive stimulus package in November.