WASHINGTON (Reuters) – Hiring by U.S. private employers slowed further in September, suggesting that trade tensions, which have pressured manufacturing, could be spilling over to the labor market.

The ADP National Employment Report on Wednesday also showed private payrolls growth in August was not as strong as previously estimated, and said “businesses have turned more cautious in their hiring,” with small enterprises becoming “especially hesitant.”

It came on the heels of a survey on Tuesday showing manufacturing activity tumbled to a more than 10-year low in September. The reports added to cooling consumer spending in suggesting that the economy was losing momentum, though a recession is probably not on the horizon.

The longest economic expansion on record, now in its 11th year, is losing ground with the blame largely put on a 15-month trade war between the United States and China, which has eroded business confidence. Slowing job growth is a concern as it could curb consumer spending, which has been the economy’s growth engine.

Private employers added 135,000 jobs in September, the ADP National Employment report showed. Data for August was revised downward to show private payrolls increasing by 157,000 jobs instead of the previously reported 195,000 positions.

Economists polled by Reuters had forecast private employment to rise by 140,000 jobs in September.

The dollar was little changed against a basket of currencies, while U.S. Treasury prices rose. Stocks on Wall Street dropped to one-month lows in early trade.

The ADP figures come ahead of the Labor Department’s more comprehensive nonfarm payrolls report due out on Friday, which includes both public- and private-sector employment.

The ADP report, which is jointly developed with Moody’s Analytics, has a poor record predicting the private payrolls component of the government’s employment report. However, last month’s job gains fit in with economists’ expectations for moderate nonfarm payrolls growth in September.

According to a Reuters survey of economists, nonfarm payrolls probably increased by 145,000 jobs in September, after rising 130,000 in August. Job gains have averaged 158,000 per month this year, but remain above the roughly 100,000 needed each month to keep up with growth in the working age population.

The unemployment rate is forecast unchanged at 3.7% for a fourth straight month.

The ADP report showed employment in the goods-producing sector increased by 8,000 jobs in September. Manufacturing payrolls rose by 2,000 jobs last month and construction added 9,000 positions. Natural resources and mining shed 3,000 jobs.

The services sector added 127,000 jobs last month, with gains concentrated in health services, professional and business services, and trade, transportation and utilities industry.

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