Private-sector hiring came in weaker than expected in August, adding to signs that the U.S. labor market continues to lose momentum.
Why it matters: Private payrolls increased by just 38,000 jobs in August, according to the ADP Employment Report, down from 46,000 in July and the weakest month since January.
- Education and health services were the clear bright spot, adding 45,000 jobs. Leisure and hospitality added 16,000, while construction employment increased by 12,000.
- Manufacturing took the biggest hit, losing 17,000 jobs during the month. Professional and business services shed another 16,000, while natural resources and mining lost 5,000.
Wage growth also showed little acceleration. Pay growth for workers who stayed in their jobs was unchanged at 3%, while wage growth for job-changers edged lower.
What they’re saying: “Pay can tell us a lot about today’s choppy hiring,” ADP Chief Economist Nela Richardson said, pointing to demographic changes, persistent inflation and AI’s impact on employment as factors making traditional hiring and wage patterns increasingly difficult to predict.
The bottom line: Layoffs remain relatively low, but companies aren’t doing much hiring either. With private payroll growth falling to its weakest level since January, the labor market continues to look increasingly stagnant ahead of the government’s official jobs report.