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Breaking Job News: ADP Report Reveals Unexpected Loss in September, Plus August Revisions

• Pete Newsome

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In today's episode, host Pete Newsome covers the latest ADP National Employment Report, highlighting a significant job loss in the private sector for September, contrary to expected gains.

He discusses the implications of this report, along with the impact of the current government shutdown, as federal agencies roll out contingency plans.

Pete also explores a study on how US and Japanese workers view the impact of AI on the job market and reviews the 2026 salary guide from Robert Half, emphasizing the value of specialized skills.

News Articles:
1. ADP National Employment Report: https://adp-ri-nrip-static.adp.com/artifacts/us_ner/20251001/ADP_NATIONAL_EMPLOYMENT_REPORT_Press_Release_2025_09%20FINAL.pdf
2. Federal Agencies' Shutdown Contingency Plans: https://federalnewsnetwork.com/government-shutdown/2025/09/heres-a-look-at-federal-agencies-contingency-plans-as-shutdown-looms/
3. How Expectations About GenAI's Impact on Jobs Shape Economic Outlooks and Behavior: https://www.hiringlab.org/2025/08/29/survey-ai-jobs-in-the-us-and-japan/ 
4. 2026 Salary Guide From Robert Half: https://www.roberthalf.com/us/en/insights/salary-guide

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SPEAKER_00:

Today's big job market headline is the ADP National Employment Report released this morning. Unfortunately, it is not the news we wanted or needed. The report shows that the private sector lost 32,000 jobs in September. And that's notable for a couple of reasons. First, around 50,000 jobs were expected to be added. So huge miss there. And to add insult to injury, ADP also revised August numbers down significantly. What was reported as a gain of 54,000 jobs is now shown as a loss of 3,000. So we've been dealing with the BLS revisions. Now this is coming from ADP. It's just making a bad situation worse. And all of this confirms what we've been seeing in other data. Hiring has essentially stopped. The job losses weren't evenly distributed. Large employers with more than 500 workers added 33,000 positions, so some positivity. But small and medium-sized companies are getting crushed, losing 60,000 jobs. On a regional basis, the Midwest was the biggest loser, dropping 63,000 jobs. And then across industries, the biggest decline was in leisure and hospitality, losing 19,000, but education and health services added 33,000. Job stayers saw wages grow 4.5% year over year, but job changers had a 6.6% boost. That's always higher. But what's relevant here is that just over 6.5% boost is down from 7.1% in August. That's a pretty big decline month over month. All of this indicates that workers have less leverage than they did a year ago, and that is a trend that we've seen for a while. The employers seem to know it. The large ones in particular do. It's just a bad job market right now. And I was holding out hope that this report would be positive, but that's clearly not the case. Needless to say, we could use a turnaround on this very, very soon. Meanwhile, the Federal News Network shared contingency plans across federal agencies now that the government has shut down. The Congressional Budget Office estimates that about 750,000 federal employees will be furloughed each day, which amounts to around 400 million in loss compensation daily. That is just a shockingly big number to see and to say out loud. The Defense Department alone expects more than 334,000 civilian employees to be sidelined, while NASA will furlough 15,000 of its 18,000 staff, keeping only mission-critical operations like International Space Station running. The Department of Education says around 80% of its staff will be furloughed. Although student loan payments and aid disbursement will continue, that's good news. Some agencies are better insulated. Homeland Security, with law enforcement and border under its control, will keep about 95% of its 272,000 employees on the job, and Veterans Affairs will also keep most of their services, exempting nearly 446,000 of its 461,000 workers with medical care and benefits unaffected. So that is good news, very important to keep that going for our veterans. And these plans highlight just how disruptive a shutdown like this really is. Court uh services like Medicare and Medicaid, law enforcement, national security, those will keep going, but a lot of agencies are taking major hits. And look, Congress needs to act. I mean, they have to get their stuff together and fix this and do what they're supposed to do. They are obligated to do and uh pass this resolution soon, or it is going to get messy very quickly. In other job news, a new study from the Indeed Hiring Lab shows how workers in the US and Japan think generative AI will impact jobs over the next decade. Both American and Japanese workers predict that AI will replace 20% of jobs within five years and around 30% within 10 years. But here's where it gets interesting. In Japan, private use of AI is far less common than it is in the US. The workers in Japan reported using it just 31% of the time privately compared to 69% of US workers. I expected they would use it more when in fact they're using it less than half of what is considered private use over here. And in the US, the people who already are using it privately expect even more job disruption, about five percentage points higher than non-users. The study also found very different reactions when workers were shown expert forecasts. In Japan, higher perceived AI job risk actually increased their interest in adopting AI at work. But in the US, especially among college-educated workers, higher risk perceptions made people more negative about labor demand and skill requirements, with no increase in willingness to adopt AI technology. Now that's a dangerous approach because AI is here to stay whether you like it or not. So if you're afraid that it's going to impact your job, that's reason to embrace it, not ignore it altogether. So please don't do that. I'm not sure who took this survey, but I didn't like seeing that number at all because this is our new normal and it's only going to increase from here. So use it to your professional advantage wherever you can. Finally, Robert Half has released its 2026 salary guide. It's October 1st. 2026 seems like a lifetime away right now with everything going on, but nonetheless, the salary guide for next year is out. The big takeaway is its specialized skills are still commanding premium pay. 84% of hiring managers say they're prepared to offer higher salaries for in-demand expertise. Don Day from Robert Half summed that up by saying specialized skills are the currency of today's job market. Specialized skills have always been the currency of the job market. Today, yesterday, tomorrow, that will be the case. Always, uh, always has, always will. It is about supply and demand. And for anyone young or early in your career, developing specialization is the key to differentiation, it is the key to higher income, more job offers. You will stand out from the crowd at whatever it is you decide to do. So this is a little off topic, but it is something that I encourage every young professional is to develop deep expertise in the area that you choose to pursue as your profession, and good things will follow. So the specialties with the biggest projected gains in the survey include AI and data science, public accounting and audit, and digital project management and marketing analytics. Now, on the employee side of this report, 88% of professionals say they feel confident negotiating salary offers, though many of them struggle with knowing what's negotiable and how to justify their requests. Now, I'm sure as a recruiting firm, Robert Half isn't biased at all, but you know who can help with negotiating compensation and salary and other benefits during a job offer? A recruiter. Robert Half is one of the biggest recruiting firms in the world, so no way they aren't biased. And they didn't outright say use a staffing agency, but the implication is certainly there. And listen, I'm with them. They're a competitor of uh of mine, but they're not wrong. Having a recruiter can be a wonderful asset to anyone in the job market because they know how to negotiate all of those things and they're not at risk of offending the hiring company or hiring manager or whoever it is that's made that job offer in the process. So as a as a job seeker, always leverage recruiters. I say it a lot, I'll say it again right now. That is to your advantage, whether it's Robert Half or my company or any others, take advantage of what a professional recruiter can do for you. And then what I saw was especially interesting in the survey is that 66% of candidates are willing to work in the office for higher pay. And most of them only need a 10% increase. So that's the question. That's what I'll leave you with today. Would you go back into the office if you're at home right now for a 10% bump? Interesting trade-offs that come from that pros and cons. So, what would you do? So that's today's rundown. Thank you for listening. But before we go, here's your fun fact: the average work week for a full-time employee in the United States is just 34 and a half hours a week. It's not 40. Everyone says 40, and that's the standard, that's the default, but that's not really what everyone's working. And I've seen that data for a while. It's not new to me. Maybe it's new to you. If you're surprised, well, there you go. There's a fun fact for today. Just 34 and a half hours on average that employees in the US are working each week. So thanks again for listening. I appreciate it. Please like, subscribe, share with anyone who you think might be interested. And as always, I welcome your feedback. Look forward to talking to you tomorrow.