US private employers added 38,000 jobs in August, the weakest ADP reading since January and below consensus. Gains stayed concentrated in healthcare and large firms, while manufacturing and business services shed jobs. The report precedes Friday's nonfarm payrolls release from the Bureau of Labor Statistics.
ADP's National Employment Report showed private payrolls rising by 38,000 in August, down from a revised 46,000 in July and short of the 48,000 economists had expected. It marks the slowest pace of hiring since January. Goods-producing employment fell 10,000, while services employment rose 48,000, leaving the headline gain positive but narrow.
Hiring concentrated in healthcare and large firms
Education and health services accounted for the bulk of the increase, adding 45,000 jobs on their own, more than the entire net private-sector gain. Leisure and hospitality added 16,000. Manufacturing, however, shed 17,000 jobs, and professional and business services lost 16,000.
Hiring also skewed toward company size. Large employers accounted for 34,000 of the total gain, while small firms added just 3,000 and medium-sized businesses saw no net change.
Wage growth keeps cooling
Pay growth continued to moderate rather than collapse. Median base pay for all workers rose 3.2% year over year, with job-stayers seeing 3% growth and job-changers seeing 4.7%. According to ADP: "decelerating for the past four years".
ADP chief economist Nela Richardson said switching jobs can still lift pay, even in a labor market where both hiring and firing stay subdued.
Friday's official payrolls report comes next
ADP has been a poor predictor of the Bureau of Labor Statistics' own payrolls figure. Economists polled by Reuters expect nonfarm payrolls to rebound by 56,000 in August after a surprise 23,000 decline in July, with the unemployment rate seen holding at 4.1%.
The BLS also reported 1.05 open jobs for every unemployed person in July, little changed from June and consistent with stable labor market conditions.
Sources: ActionForex, Investing.com, Yahoo Finance
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