US private sector job growth well below estimates in August
Payroll processor ADP released a report on Wednesday showing private sector employment in the United States grew much less than expected in August.
ADP said private sector employment rose 132,000 jobs in August after jumping 268,000 jobs in July. Economists expected an employment increase of 288,000 jobs.
“Our data suggests a shift to a more conservative pace of hiring, perhaps as companies try to decipher the economy‘s mixed signals,” said ADP chief economist Nela Richardson. “We could be at an inflection point, from supercharged job gains to something more normal.”
ADP suspended its jobs report for June and July as the company revamped its methodology and entered into a partnership with the Stanford Digital Economy Lab.
The relatively modest increase in employment in August reflects notable employment growth in the leisure and hospitality sector, which added 96,000 jobs.
Employment in the trade, transport and utilities sector also increased by 54,000 jobs, while the report showed modest declines in employment in financial, professional and Company service and education and health service sectors.
The report also showed that employment in the goods-producing sector increased by 23,000 jobs, with employment in the manufacturing sector increasing by 21,000 jobs and employment in the construction sector by 2,000. jobs.
Employment in small establishments increased by 25,000 jobs, while medium and large establishments added 53,000 jobs and 54,000 jobs, respectively.
ADP also said the year-over-year change in annual earnings was 7.6% in August, consistent with monthly readings since spring 2022.
On Friday, the Labor Department is expected to release its more closely watched monthly jobs report, which includes public and private sector jobs.
Economists currently expect employment to jump 300,000 jobs in August after rising 528,000 jobs in July, while the unemployment rate is expected to remain at 3.5%.
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