U.S. private sector adds 749,000 jobs in September: RPT

In September, the U.S. private sector added 749,000 jobs, according to ADP. Meanwhile, Disney is laying off 28,000 employees as the COVID-19 hits the park business. Yahoo Finance's Emily McCormick joins Yahoo Finance’s The First Trade with Alexis Christoforous and Brian Sozzi to discuss.

Video Transcript

ALEXIS CHRISTOFOROUS: All right, back to the economy now, and new data this morning out on the job market. The private payroll company ADP says the private sector added 749,000 new jobs in September, and we know it comes just two days before the government's monthly jobs report. Yahoo Finance's Emily McCormick joins us now with the details. So Emily, this number was better than expected, right?

EMILY MCCORMICK: That's right, Alexis. So consensus economists had been looking for the ADP monthly private payrolls report to show net payroll gains of 649,000. Now, the actual number we got was 100,000 better than that at 749,000, so one of the first upside surprises we've seen in a couple months here in this ADP report. Now, I want to point out as well that this is the fifth consecutive month that we're seeing net payroll gains here from ADP, really driven here by the service providing sector.

Remember, that that had been the hardest hit in the initial innings of the pandemic. These jobs actually totaling 552,000 in September brought back in that service providing sector. This was led, in turn, by trade, transportation and utilities. Those industries adding back 186,000 jobs, and health care and social assistance positions rose by 101,000. Now, we did see education the laggard here, the only industry to shed payrolls on net with those falling by 11,000.

Now, taking a look at the goods producing sector, we also saw that continue to add back jobs on net. Sector-wide, we saw employment there rising by 196,000 end September, led by a gain of 130,000 in manufacturing industries. Now, as you mentioned, this is coming two days before the September jobs report from the Labor Department. Now, note that the number that we got here from ADP is still short of what consensus economists are expecting from private non-farm payroll gains in the DOL report. That number here looking at $875,000 for Friday. And again, with ADP, we did get 749,000 this morning, Alexis.

ALEXIS CHRISTOFOROUS: And we have to talk about Disney. It's one of our top trending tickers this morning. The company going to lay off 28,000 workers in its theme parks division because of closures and capacity limits at its parks due to the pandemic. What else can you tell us about these layoffs?

EMILY MCCORMICK: Well, these layoffs are set to include both executives and salaried employees, though 2/3 of those impacted of that 28,000 are set to include part time workers. Now, these cuts are mostly going to impact Disney's Florida and California theme parks. Note that California's Disneyland remains closed since the pandemic really began in March since the state has not yet restarted theme park operations on the whole.

Now, remember taking a look at Disney here, we have seen that parks, experiences and products segment the anchor on the company as travel and tourism remains low. We know, just from looking at Disney's latest quarterly report, that for the period ending in June, the park segment swung to a quarterly operating loss of nearly $2 billion as revenue fell 85% during the pandemic. Now, Disney, of course, is not the only company to have recently announced job cuts. We also got an announcement from Shell this morning that it plans to cut up to 9,000 jobs by 2022, but I do want to point out that at 28,000, this is one of the largest job productions that we've seen so far during the pandemic period, Alexis.

ALEXIS CHRISTOFOROUS: All right, thanks a lot, Emily.