A closely watched private payrolls report unexpectedly showed job losses in September, stoking fresh doubts about U.S. labor market resilience and reinforcing bets that the Federal Reserve could lower interest rates again soon.

The ADP National Employment Report recorded a net loss of 32,000 private-sector jobs in September 2025, the weakest monthly performance since March 2023. The result came in well below expectations for a 50,000 job gain and marked a sharp swing from August's revised increase of 54,000.

The monthly data—derived from anonymized payroll records of over 26 million workers—carries added weight this month due to the ongoing government shutdown, which is expected to delay Friday's official jobs report from the Bureau of Labor Statistics.

"Despite the strong economic growth we saw in the second quarter, this month's release further validates what we've been seeing in the labor market, that U.S. employers have been cautious with hiring," said Dr. Nela Richardson, chief economist at ADP.

Where Were The Job Cuts?

Losses were spread across sectors, suggesting more than just industry-specific weakness. The leisure and hospitality sector was hit the hardest, shedding 19,000 jobs, reflecting potential softness in consumer discretionary spending.

Only three sectors showed positive hiring trends: Education and health services, up by 33,000, information, up by 9,000 and mining and natural resources, up by 4,000.

On the wage front, pay gains remained stable for workers staying in their jobs, with year-over-year growth holding at 4.5%. However, those switching jobs saw a deceleration: pay growth slowed to 6.6% in September from 7.1% in August, suggesting reduced upward pressure on wages.

Markets React: Stocks Dip, Bonds Rally

Markets leaned risk-off following the ADP release and amid broader concerns about the federal shutdown.

During Wednesday’s premarket trading, futures on the S&P 500 fell 0.4%, contracts on the Nasdaq 100 dropped 0.3% and those on the Dow Jones lost 0.38%.

Meanwhile, Treasury markets rallied as investors shifted to safer assets. The 10-year Treasury yield declined to 4.12%, reflecting rising demand for bonds amid fears of a broader economic slowdown.

In commodities, gold – as tracked by the SPDR Gold Shares ( GLD ) – surged to $3,900 per ounce, marking its eighth positive session in nine days.

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Image created using artificial intelligence via Midjourney.