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By Suzanne Blake
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America's labor market continued adding jobs in September, but the gains were concentrated in a handful of industries. Meanwhile, some of the nation's most prominent white-collar sectors continued to shrink.
According to the latest ADP National Employment Report, private employers added 90,000 jobs in September, which was a rebound from weaker hiring in August.
But beneath the headline number, two traditionally higher-paying office sectors moved in the opposite direction: Financial activities lost 16,000 jobs and professional and business services shed 11,000 positions.
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Why It Matters
The new data has shown a growing divide in the labor market. While hiring remains healthy in areas like healthcare, education and hospitality, many office-based industries are grappling with slower demand and artificial intelligence taking over prior job functions
Due to this, college graduates and young professionals are facing one of the most challenging white-collar job markets in years, experts say.
“The easiest answer would be AI and the disappearance of entry level jobs in the financial sector, but it may be deeper than that,” Kevin Thompson, CEO of 9i Capital Group and host of the 9innings podcast, told Newsweek. “The real answer probably lies somewhere between AI and interest rates. With higher interest rates comes reduced financial activity.”
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What To Know
According to ADP, private-sector employment increased by 90,000 jobs in September, exceeding many economists' expectations and marking the first acceleration in hiring since May.
The strongest gains came from:
- Education and health services: +55,000 jobs
- Leisure and hospitality: +22,000 jobs
- Manufacturing: +17,000 jobs
- Construction: +15,000 jobs
Meanwhile, the weakest sectors were:
- Financial activities: -16,000 jobs
- Professional and business services: -11,000 jobs
- Natural resources and mining: -1,000 jobs
"It's a strong report. After a three-month slowdown, job creation rebounded and pay growth remained solid,” ADP Chief Economist Nela Richardson said in the report.
Why Financial and Professional Jobs May Be Weakening
Several pressures may be affecting white-collar hiring.
For one, financial firms are cautious about expanding their headcounts as higher interest rates over the past several years have dampened lending activity.
At the same time, professional-services firms are facing pressure from clients looking to reduce costs amid economic uncertainty.
“Higher interest rates will curtail financial activity due to the cost of capital. We may see a slowing in that sector of the economy, but most of the heavy lifting is still in the broader technology space,” Thompson said.
Technology is also reshaping hiring decisions. Because many employers are investing heavily in AI, this can automate key administrative and research work that was once performed by entry-level employees.
“Financial jobs are disappearing primarily because the industry is undergoing two transitions simultaneously, those being higher borrowing costs have weakened areas such as lending and real estate, while AI is allowing banks to perform many routine tasks with fewer employees,” Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek.
What Happens Next
Experts say if the current trends in the ADP report continue, the labor market may increasingly be defined by a paradox: steady job growth overall, but fewer opportunities in many of the white-collar fields that many college graduates have long considered the safest path to economic mobility.
“I don't think financial careers are disappearing, but they're clearly changing,” Beene said. “The jobs most dependent on repetitive transactions, basic underwriting, and traditional branch operations face greater pressure, while demand remains stronger for analysts and workers who can combine financial expertise with technology.”
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