Private wage growth slowed significantly in September, according to an ADP report on Wednesday that compares with other signs that the labor market remains strong.
The payroll company said job growth was just 89,000 for the month, down from an upwardly revised 180,000 in August and below the 160,000 estimate from economists polled by Dow Jones.
The report signaled that the previously strong labor market could loosen and gave the Federal Reserve an incentive to hold off on raising interest rates. ADP also said annual wage growth slowed to 5.9%, which was the 12th consecutive monthly decline.
However, the ADP figures could differ significantly from the government's official calculations, which will be released on Friday. Experts expected nonfarm payrolls to rise by 170,000 in September, down from a 187,000 increase in August, according to Dow Jones.
"We saw a significant decline in employment this month," said Nela Richardson, chief economist at ADP. "In addition, we have seen a gradual decline in wages over the past 12 months."
The report came a day after the Labor Department said job openings rose unexpectedly in August. The Employment Survey and Employment Cycle report exacerbated concerns that the Fed would need to maintain a tight monetary policy to control inflation.
However, the number of unemployed also increased significantly, lowering the ratio of open jobs to available workers to 1.5 to 1, where it previously stood at 2 to 1.
The US dollar index which measures the strength of the US dollar against six major currencies was traded down by 0.39% to a trading level of 106.305.
