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Instant View: U.S. private sector adds 166,000 jobs in September

NEW YORK (Reuters) - U.S. private employers added 166,000 jobs in September, lower than economists' expectations for the month, a report by a payrolls processor showed on Wednesday.

Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 180,000 jobs. August's private payrolls gains were revised to 159,000 from the previously reported 176,000.

COMMENTS:

JIM O'SULLIVAN, HIGH FREQUENCY ECONOMICS, VALHALLA, NEW

YORK:

"There has been a growing case for the ADP report to get more attention than it did in the past; its reliability seems to have improved since Moody's replaced Macroeconomic Advisers as the compiler of the data late last year.

"ADP's misses have averaged 38,000 in the 11 months since Moody's took over, down from 63,000 in the previous 11 months."

RICK MECKLER, PRESIDENT OF HEDGE FUND LIBERTYVIEW CAPITAL

MANAGEMENT LLC, JERSEY CITY, NEW JERSEY:

"What's really controlling attention is the government budget crisis. If the numbers had come up really, really strong, perhaps people would overlook the problems in Washington. But with the numbers coming in slightly below expectations, it renews concern that the recovery could start to peter out and more importantly, earnings growth could start to slow."

CHRIS GAFFNEY. SENIOR MARKET STRATEGIST, EVERBANK WEALTH

MANAGEMENT, ST. LOUIS, MISSOURI:

"Lower than expected which should be negative for the dollar. Gold should run up. It basically says that the stimulus will continue. The government shutdown will be a negative impact on the U.S. economy extending the need for additional stimulus."

MARKET REACTION:

STOCKS: U.S. stock index futures added to losses. S&P 500 futures fell 10 points, Dow Jones industrial average futures lost 62 points and Nasdaq 100 futures declined 12.5 points. BONDS: U.S. Treasuries prices extended their earlier rise on Wednesday after data showed U.S. companies added fewer jobs than expected in September, supporting the view the Federal Reserve will stick to its current level of bond purchase stimulus in near future. Benchmark 10-year Treasury notes last traded up 10/32 in price with a yield of 2.614 percent, down nearly 4 basis points from late on Tuesday. Shortly before release of the ADP data, the 10-year note was up 3/32 in price with a yield of 2.639 percent. FOREX: The dollar extended losses versus the yen, erased gains versus the euro

GRAPHIC:

ADP vs. the U.S. Labor Department: The ADP National Employment Index shows an increase of 166,000 private sector jobs in September - 14,000 fewer than analysts expect Friday's Labor Department report to show. http://link.reuters.com/fex44t

(Americas Economics and Markets Desk; +1-646 223-6300) nL1N0HS0JB

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