Private sector employers eliminated 32,000 jobs in September despite ongoing pay growth, according to the latest ADP National Employment Report, while the highly anticipated federal Bureau of Labor Statistics jobs report remains absent due to an ongoing government shutdown.

The ADP report, released on Tuesday by the payroll processing company in collaboration with the Stanford Digital Economy Lab, revealed that private employment declined by 32,000 positions, while annual pay increased by 4.5 percent year-over-year. The job losses mark a continuation of the cooling labor market that has characterized recent months.

The absence of the federal jobs report, traditionally released on the first Friday of each month, has created significant uncertainty for policymakers and economists attempting to gauge the health of the U.S. labor market. 

The shutdown has also disrupted other critical economic data releases, including weekly unemployment claims reports and upcoming Consumer Price Index data scheduled for October 15. The Bureau of Economic Analysis has similarly suspended operations, affecting import/export data and GDP statistics.

The ADP data showed significant variation across industries and regions. While the overall private sector shed jobs, education and health services added 33,000 positions, and natural resources/mining gained 4,000 jobs. Conversely, leisure and hospitality lost 19,000 positions, other services declined by 16,000, and professional/business services dropped 13,000 jobs.

Geographically, the Midwest bore the brunt of job losses with 63,000 positions eliminated, particularly in the East North Central region, which lost 67,000 jobs. The Northeast bucked the trend by adding 21,000 jobs, while the South and West showed modest gains of 3,000 and 15,000 positions, respectively.

Company size proved a crucial factor, with small establishments (1-49 employees) eliminating 40,000 jobs and medium-sized companies (50-499 employees) cutting 20,000 positions. Large establishments with 500 or more employees added 33,000 jobs.

Despite the decline in employment, wage growth showed resilience. Job-stayers saw annual pay increases of 4.5 percent, while job-changers experienced 6.6 percent growth, down from 7.1 percent in August. Financial activities workers enjoyed the highest pay increases among job-stayers at 5.2 percent, while workers at the smallest firms (1-19 employees) saw more modest gains of 2.7 percent.

The lack of federal employment data poses significant challenges for Federal Reserve officials preparing for their late October meeting. 

The Fed reduced interest rates by 0.25 percentage points in September and had been expected to consider additional cuts based on labor market conditions. However, Fed Chair Jerome Powell previously noted the unusual nature of current economic conditions, where a weakening labor market coincides with persistent inflation pressures.

The government shutdown stems from congressional disagreements over federal spending levels, foreign aid, and health insurance subsidies. The Trump administration has indicated plans for potential mass layoffs of federal workers, with Budget Director Russell Vought announcing the freezing of approximately $26 billion in funding across various programs.

Democratic Senator Elizabeth Warren has called on the Trump administration to release the September jobs report despite the shutdown, arguing that the data has already been processed and prepared. 

ADP’s preliminary rebenchmarking also revealed that August job creation was revised downward from 54,000 to negative 3,000, indicating the private sector actually lost jobs in that month as well. The company’s full annual benchmarking will occur in February 2026 with the release of January employment data.