Investors have been focusing on Friday’s jobs report for September for clues as to whether the Fed might keep up its pace of outsize rate hikes in the face of robust wage gains that have been fueling inflation. Meanwhile, complementary ADP® National Employment Report™ already showed that private sector employment increased by 208,000 jobs in September and annual pay was up 7.8% YoY in September, according to the ADP Research Institute.

Businesses created 208,000 jobs in September, up from a revised 185,000 in August, as schools reopened and pandemic concerns receded. The median forecast in a Bloomberg survey of economists called for a 200,000 advance. Nearly three-fourths of the increase in private payrolls last month was driven by a surge in employment in trade, transportation and utilities. Employment in manufacturing and mining declined. Payrolls in financial activities also fell, to the lowest level since December 2020.

But while job growth is stable, it remains below the recent three-month average. Notwithstanding, job changers, who have been notching double-digit, year-over-year gains since the summer of 2021, lost momentum in September. Their annual pay rose 15.7%, down from a revised 16.2% gain in August. It's the biggest deceleration in the 3-year history of our data. For job stayers, annual pay rose 7.8% in September from a year ago, up from a revised 7.7% in August.