The U.S. private sector added 38,000 jobs in August, according to payroll processor ADP, falling short of consensus economic expectations and marking the smallest monthly growth since January. Economists polled by Bloomberg had anticipated a gain of 47,000 jobs, while Dow Jones consensus estimates pointed to a similar 47,000 increase, highlighting a continued cooling trend in the American labor market.
Sector Breakdown Shows Manufacturing and Professional Services Losses
Job gains during August were heavily concentrated in specific service industries, while goods-producing sectors experienced notable contractions. Education and health services led the expansion by adding 45,000 positions, according to data reported by Quartz. Leisure and hospitality added 16,000 jobs, and the construction sector contributed 12,000 new positions.
Conversely, manufacturing shed 17,000 positions, and professional and business services declined by 16,000 jobs. Additional losses hit natural resources and mining, alongside trade, transportation, and utilities, which each dropped 5,000 positions, as detailed by Quartz.
July’s job gains were revised upward slightly to 46,000 from an initially reported 44,000, according to ADP data cited by Yahoo Finance and Quartz. Total U.S. private payroll growth continues to decelerate against a backdrop of broader labor market softness, where total hires slipped to 5.1 million in July and the quits rate fell to 1.9%, according to data cited by Quartz.
Wage Growth and Business Size Disparities
Large employers accounted for nearly all payroll expansion in August. Businesses with 500 or more employees added 34,000 positions, whereas the smallest firms with under 50 workers added just 3,000 jobs, according to Quartz. Medium-sized establishments remained flat on net.
Wage growth indicators showed diverging trends between workers who switch jobs and those who stay put. Job switchers saw their base wages increase by 4.7% year-over-year, while base wages for employees who stayed in their roles rose by 3.0%, according to Yahoo Finance and Quartz. ADP chief economist Nela Richardson noted via Yahoo Finance that there is “still some opportunity to boost wages by changing jobs, even in this low fire, low hire job market.”
“Once predictable wage growth has been overtaken by complexities of demographic change, persistent inflation, and AI’s effects on jobs,” Dr. Richardson said in a statement published by Quartz.
Upcoming Labor Department Data Release
Market participants are now looking ahead to the official government employment report. On Friday, the U.S. Labor Department will release its August jobs data, which encompasses surveys of both public and private sector employers, according to Yahoo Finance. Economists surveyed by Dow Jones expect the upcoming government report to show that the U.S. added 53,000 total jobs, with the unemployment rate anticipated to remain at 4.1%, as reported by Quartz.
Related reading