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US private employers boost hiring in Sept

US private payrolls recorded their biggest increase in seven months in September, boosted by hiring at construction sites and in the services sector, pointing to sustained labour market strength that should continue to underpin economic growth.

The economic outlook was bolstered by other data on Wednesday showing activity in the vast services sector accelerating to a 21-year high last month, with companies reporting strong order growth and hiring.

"The labour market continues to boil and is growing hotter," said Chris Rupkey, chief economist at MUFG in New York.

"More workers with money in hand to spend will lead to more consumer spending down the road."

Private payrolls jumped by 230,000 jobs in September, the largest gain since February, the ADP National Employment Report showed on Wednesday, after increasing 168,000 in August. Last month's rise beat economists' expectations for a 185,000 gain.

The ADP report, which is jointly developed with Moody's Analytics, was published ahead of the government's more comprehensive employment report for September due on Friday.

According to a Reuters survey of economists, non-farm payrolls likely increased by 185,000 in September after surging 201,000 in August. The unemployment rate is forecast to fall one-tenth of a percentage point to 3.8 per cent, an 18-year low first hit in May.

The US central bank increased rates last week for the third time this year, noting that "the labour market has continued to strengthen" and "job gains have been strong, on average."

Separately, the Institute for Supply Management (ISM) said on Wednesday its non-manufacturing activity index jumped 3.1 points to 61.6 last month, the highest reading since August 1997. A reading above 50 indicates expansion in the sector, which accounts for more than two-thirds of US economic activity.

Though companies remained upbeat about business conditions, the ISM reported lingering concerns "about capacity, logistics and the uncertainty with global trade."

Industries are bumping against capacity constraints in a robust economy and tightening labour market conditions. Companies are increasingly reporting difficulties finding qualified workers to meet demand.

Austrlaian Associated PressBack to Breaking News

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