Survey: US Companies Added a Healthy 230,000 Jobs Last Month
U.S. businesses added a robust 230,000 jobs in September, a private survey found, a sign that strong economic growth is spurring companies to add more workers.
Payroll processor ADP said Wednesday that September’s job gain was the most in seven months. It followed 168,000 new jobs in August, a figure that was revised slightly higher.
Hiring was strong across most major industries. Construction firms added 34,000 jobs, while professional and business services, which includes higher-paying jobs such as engineering and accounting as well as temp workers, added a strong 70,000. Education and health services added 44,000 jobs.
ADP’s report comes a day before the government releases jobs data for September. Economists believe Friday’s report will show that employers added 183,000 jobs, according to data provider FactSet.
“The labor market continues to impress,” Ahu Yildirmaz, vice president of the ADP Research Institute, said.
Mark Zandi, chief economist at Moody’s Analytics, which helps compile the data, said Hurricane Florence likely had little effect on the figures. That’s because ADP counts someone as employed even if they miss work because of bad weather.
The government’s jobs data, however, counts someone as employed only if they were paid during the period when the government conducts its jobs survey. Zandi estimates that the storm could reduce Friday’s figure by about 25,000.
Consumers are confident and businesses are spending more, pushing growth to 4.2 percent at an annual rate in the April-June quarter, the best in four years. Analysts forecast that growth could reach nearly 3.5 percent in the current quarter.
Strong Economy: Services Firms Grew at a Record Pace in September
U.S. services firms expanded at a record pace last month, stepping up production and hiring, in another sign of strength for the American economy.
The Institute for Supply Management, a trade group of purchasing managers, reports that its services index hit 61.6 in September, up from 58.5 in August and the highest in records going back to 2008. Anything above 50 signals growth, and services companies are on a 104-month winning streak.
Economists had expected the index to fall slightly in September.
Seventeen services industries reported growth last month, and none declined.
The services sector enjoyed faster growth in just about every activity — production, new orders, hiring, prices, export orders.
The uptick in the ISM index reflects a healthy economy, helped partly by recent tax cuts. “Activity is still being boosted by the substantial fiscal stimulus enacted earlier this year,” Andrew Hunter, U.S. economist at Capital Economics, wrote in a research note.
“I don’t know how sustainable this rate of growth is,” said Anthony Nieves, chair of the ISM’s services survey committee. Nieves said the index was probably boosted, in part, by local governments stepping up spending before year’s end.
Some of the services firms responding to the ISM survey complained about labor shortages and the impact of U.S. tariffs this year on imported steel, aluminum and products from China.
From April through June, the U.S. economy grew at a 4.2 percent annual pace, fastest in nearly four years. Consumer spending on services rose at a 3 percent rate, fastest in more than three years.
Private services companies account for more than 70 percent of U.S. nonfarm jobs.
Delta Air Lines Says Hurricane Florence Cost it $30M
Delta’s stock fell 3.4 percent on Tuesday after the airline said it took a $30 million hit from Hurricane Florence and is paying more for fuel.
Last month’s hurricane caused at least 3,500 flight cancellations, mostly in the Carolinas. Delta said on Sept. 17 that it canceled 275 to that point and was still dealing with disruptions at two airports. The company did not give a figure in a regulatory update on Tuesday.
Delta Air Lines Inc. said that third-quarter revenue for every seat flown one mile rose between 4 and 4.5 percent, a sign of rising prices.
It said the extra revenue will help “partially offset” a 35 percent increase in spot fuel prices in the past year.
The Atlanta-based airline expects to report adjusted profit of $1.70 to $1.80 per share for the third quarter. Analysts expected $1.78.
Its stock closed down $1.91, at $54.69. Other leading U.S. airline stocks fell by smaller percentages.
J.C. Penney Names Former Exec of Jo-Ann’s as CEO
J.C. Penney has named Jill Soltau, who most recently served as president and CEO of fabric and crafts chain Jo-Ann Stores, to be its next CEO, effective Oct. 15.
Soltau, a 30-year retail veteran, succeeds Marvin Ellison, who resigned this past summer to take the top job at home improvement chain Lowe’s after less than four years at the helm.
Ellison’s departure raised speculation that he wasn’t particularly optimistic about Penney’s prospects. The department store chain, which is based in Plano, Texas, is still struggling despite a stronger economy that has lifted sales at its peers like Macy’s and Kohl’s.
Penny’s stock rose 10 percent in after-hours trading.
Lawsuit Accuses Facebook of Enabling Human Traffickers
A human trafficking survivor from Texas has filed a lawsuit against Facebook, alleging the social media giant provides traffickers an unrestricted way to “stalk, exploit, recruit, groom … and extort children into the sex trade.”
The lawsuit was filed Monday in Houston against Facebook, the shuttered classifieds site Backpage.com and the owners of two Houston hotels.
The suit seeks at least $1 million in damages on behalf of a woman identified as “Jane Doe,” who was 15 years old when she was sexually assaulted in 2012 after being allegedly targeted and recruited by a sex trafficker on Facebook.
Facebook did not immediately return an email seeking comment Tuesday.
Legal and trafficking experts say it may be difficult for the lawsuit to show that Facebook knowingly facilitated human trafficking.
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