Payrolls Shrink, Gold Brushes $3,900 Amid Labor Squeeze | SchiffGold

U.S. private employers unexpectedly cut 32,000 jobs in September, according to the latest ADP National Employment Report released Tuesday, marking the first aggregate decline since early 2024. Goods makers shed 3,000 positions and service industries bled another 28,000, with layoffs concentrated in leisure and hospitality (-19,000) and professional and business services (-13,000). The dismal headline arrives just as spot gold flirted with $3,885 an ounce on Wednesday, a fresh reminder that hard assets often shine when confidence in the economy wobbles.

ADP’s numbers look even weaker once revisions are folded in. The payroll processor’s preliminary rebenchmarking erased 43,000 positions from the September tally and turned August’s previously reported 54,000 gain into a 3,000 loss. “U.S. employers have been cautious with hiring,” conceded ADP chief economist Dr. Nela Richardson, despite what government statisticians still cite as robust second-quarter GDP growth. The stark Midwest plunge—63,000 jobs lost, including 67,000 in the East North Central corridor—suggests that the manufacturing heartland is feeling the brunt of higher interest rates and soggy global demand.

While headline job creation faltered, wage growth is no longer the inflation-fueled juggernaut seen in 2022. Median year-over-year pay for workers sticking with their current employer rose 4.5% in September, well above the Fed’s 2% price-stability target but trending lower. Job-hoppers saw an even sharper deceleration: 6.6% in September versus 7.1% a month earlier. The slowdown is strikingly uneven. Workers at big firms (500+ employees) notched 4.8% raises, whereas employees at mom-and-pop outfits with fewer than 20 workers scraped by with just 2.7%. In other words, Main Street is absorbing the pain while corporate behemoths still have room to maneuver.

Sector and firm-size splits paint a similar picture. Education and health services bucked the trend by adding 33,000 positions, but that bump couldn’t offset losses at customer-facing leisure outfits or white-collar consultancies, both traditionally sensitive to discretionary income and capital-spending cycles. Large employers logged a 33,000-job gain, while small businesses slashed 40,000 roles—yet another sign that balance-sheet heft decides who survives higher borrowing costs.

If payroll declines persist—and especially if subsequent revisions keep wiping away previously reported gains—the case for sound money hedges will only strengthen. For now, the jobs engine is sputtering, wage gains are narrowing, and capital is quietly drifting toward the safety of bullion.

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