August proved to be the weakest month for private sector hiring since January, with job creation falling short of already modest expectations.
Payrolls processing firm ADP reported Wednesday that private U.S. companies added 38,000 workers during the month, missing the Dow Jones consensus estimate of 47,000.
The August figure also fell below the upwardly revised 46,000 jobs added in July, underscoring a broadening deceleration in the labor market.
Job growth remained heavily concentrated in just a handful of sectors, with most industries either stagnating or reporting outright losses during the month.
Education and health services led all categories with 45,000 new positions, continuing to serve as the primary engine of employment growth in the current economic environment.
Leisure and hospitality contributed an additional 16,000 jobs, while construction added 12,000, together accounting for nearly the entire month’s gains alongside the education and health sector.
Manufacturing was among the hardest hit, shedding 17,000 jobs, while professional and business services declined by 16,000 positions during the same period.
Natural resources and mining, along with trade, transportation, and utilities, each reported losses of 5,000 jobs, further reflecting the uneven nature of the current hiring environment.
Large employers drove nearly all positive momentum, with companies employing 500 or more workers accounting for 34,000 new hires, while firms with fewer than 50 employees added just 3,000.
ADP also reported that pay growth held steady in August, with base pay for workers remaining in their jobs rising 3% year-over-year, while gross pay, which includes tips, commissions, and bonuses, increased 4.4%, both unchanged from July.
For all workers combined, base pay rose 3.2% and gross pay climbed 4.7% compared to the prior year, according to ADP’s expanded pay reporting feature introduced this month.
The ADP report arrives ahead of the Bureau of Labor Statistics’ nonfarm payrolls release due out Friday, which is expected to show a gain of 53,000 after July’s decline of 23,000.
The unemployment rate is forecast to hold steady at 4.1%, according to consensus expectations heading into Friday’s closely watched government report.
