The job market, and consumer confidence, continue to stumble

Private employers cut more jobs than expected last month. | Image: Shutterstock.

Finding bright spots in the economy is getting increasingly difficult.

On Wednesday, the human resources firm ADP said that private employers shed 32,000 jobs in September, a number that fell well below economists’ expectations. Leisure and hospitality employers—dominated by restaurants and hotels—cut 19,000 jobs. 

Declines were largely concentrated among all but the biggest companies, particularly those with fewer than 50 workers. Large companies added 33,000 jobs, despite reports that companies like Starbucks (900 workers) and the IT consulting firm Accenture (11,000 workers) are laying off employees.

In addition, ADP revised its August private jobs estimate down from a gain of 54,000 jobs to a loss of 3,000 jobs.

Pay rates for those remaining on the job increased 4.5%. For those who changed jobs, pay rates increased 6.6%, down from a 7.1% increase in August. 

The jobs report is the only one we’ll get this week. The federal government shut down this week, which will prevent the U.S. Bureau of Labor Statistics from releasing its monthly employment report, which had been set for Friday. More importantly, the shutdown is affecting the job status of millions of federal workers. 

The White House said this week it was planning to furlough additional federal workers.

Jobs remain the biggest, single factor in restaurant sales. When people lose jobs, or are worried about losing jobs, they frequently cut back on dining out to save money. As it is, consumers are already dining heavily on a deal: 29% of restaurant traffic is for discounted meals, according to Circana. 

Consumer confidence is another driver of restaurant sales, especially now. And those numbers are falling, too.

The Consumer Confidence Index declined 3.6 points in September, driven largely by consumers’ assessment of current conditions, according to The Conference Board. But their expectations for market conditions in the future also fell. 

It was the lowest level for that index since April, when tariff concerns spooked consumers and led to a steep drop in industry sales across the board. 

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