Jobseekers talk to recruiters during a job fair in the Bronx borough of New York. Photographer: Yuki Iwamura/Bloomberg
Private-sector payrolls increased by 54,000 in August, roughly half of July’s pace, according to ADP Research data released today. The median estimate in a Bloomberg survey of economists called for a 68,000 gain. The ADP report lines up with recent data that indicate the labor market is gradually cooling, marked by fewer job openings and softer wage gains.
Job growth has slowed significantly in recent months, and it’s taking longer for unemployed people to find a new job. In the ADP report, industry sectors adding jobs were led by leisure and hospitality, while construction and business services also added headcount. Trades, education, healthcare, and manufacturing shed jobs.
“The year started with strong job growth, but that momentum has been whipsawed by uncertainty,” Nela Richardson, chief economist at ADP, said in a statement.
The government’s August employment report, due tomorrow, will be closely watched by both the Federal Reserve and investors after the prior release showed employment was substantially weaker in recent months than previously thought. Economists are now forecasting that August payrolls rose by 75,000, and they expect to see unemployment tick slightly higher.
Fed officials are expected to lower interest rates by a quarter percentage point at their policy meeting later this month amid concerns about further weakening in the labor market. In addition to ADP’s monthly releases to the public, its data is monitored on a weekly basis by the Fed to track employment changes. In a speech last week, Fed Governor Christopher Waller said ADP’s preliminary estimates in the weeks after the reference period for the July jobs report showed “continued deterioration.”
At the same time, average payroll gains over the past six months have been the weakest since the pandemic. The ADP report, published in collaboration with the Stanford Digital Economy Lab, showed that wage growth was little changed. Workers who switched jobs saw a 7.1 percent increase in pay, while those who stayed put saw a 4.4 percent gain. ADP bases its findings on payroll data covering more than 25 million U.S. private-sector employees.
A separate report out today from outplacement firm Challenger, Gray & Christmas showed hiring plans fell last month to the weakest level for any August on record and intended job cuts are mounting. Other data showed applications for U.S. unemployment benefits rose last week to the highest since June. And a tracker from Revelio Labs showed employment slowed notably in August.
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