ADP data showed that private sector employment growth was the weakest in 3.5 years in August, again indicating a deterioration in the labor market.
Companies hired just 99,000 workers this month, down from July’s downward revision of 111,000 workers and below the average Dow Jones forecast of 140,000 workers.
August was the weakest month for job growth since January 2021, according to data from payroll processing companies.
“After two years of significant growth, the declining job market has caused us to hire at a slower than normal pace,” said Nela Richardson, chief economist at ADP.
The report confirms multiple recent data points showing that recruitment has slowed significantly since the onset of the COVID-19 pandemic in early 2020.
Job vacancies in July Employment also hit its lowest point since January 2021, according to a report from the Labor Department on Wednesday, while outplacement firm Challenger, Gray & Christmas reported Thursday that Worst August for layoffs It’s the slowest hiring pace since 2009, when the company started tracking the metric in 2005.
Still, ADP data showed that only a handful of industries reported actual job losses despite a sharp slowdown in hiring. Professional and business services fell by 16,000, manufacturing fell by 8,000, and information services fell by 4,000.
The latest Labor Department data also helped dispel concerns about widespread layoffs, with initial jobless claims falling to 227,000 in the week ended August 31, slightly below the consensus forecast of 229,000.
On the bright side, education and health services added 29,000, construction added 27,000, and other services contributed 20,000. Financial activities also rose 18,000 points, and trade, transportation and utilities rose 14,000 points.
Looking at size, companies employing fewer than 50 employees reported a loss of 9,000 employees, while companies employing 50 to 499 employees added 68,000 employees.
Wages continue to rise, but at a slower rate than some previous increases. Annual wages for those who stayed on the job rose 4.8%, about the same level as in July, according to ADP.
ADP count is now ready The non-farm payrolls report that attracts more attentionthe Bureau of Labor Statistics will release on Friday. While the two reports may differ significantly, they are almost identical to what happened in July.
Consensus forecast employment will increase by 161,000 An increase of 114,000 in JulyThe unemployment rate edged down to 4.2%, although recent data may add some downside risks to the estimate. Private-sector employment increased by just 97,000 in July, according to the U.S. Bureau of Labor Statistics (BLS).
market expectations Employment situation is weak Push the Federal Reserve to cut interest rates at its meeting on September 17-18. The main question is how quickly and aggressively the Fed will act, with current market pricing pointing to a cut of at least a quarter of a percentage point at this month’s meeting and a full percentage point cut to the federal funds rate by the end of 2024.
ADP reported that it re-benchmarked its data against the quarterly census of employment and wages, which resulted in a 9,000-job decrease in employment in the August report. Similar adjustments from the U.S. Bureau of Labor Statistics indicate Nonfarm payrolls were overcounted by 818,000 From April 2023 to March 2024.
