According to ADP, private sector job growth in August was weaker than anticipated, with an addition of only 38,000 jobs compared to a revised 46,000 in July and below the Dow Jones estimate of 47,000. This marks the smallest increase since January, suggesting a broader deceleration in employment.
The majority of job gains were concentrated in health care and education services, which added 45,000 jobs, while leisure and hospitality contributed 16,000 and construction added 12,000. Conversely, manufacturing saw a loss of 17,000 jobs, and professional and business services dropped by 16,000.
Notably, large companies (those with 500 or more employees) accounted for most of the job growth, adding 34,000 positions. Pay growth remained stable, with base pay rising 3% year-over-year and gross pay increasing by 4.4%.
This report serves as a precursor to the upcoming Bureau of Labor Statistics' nonfarm payrolls data, which is expected to show a gain of 53,000 jobs for August, following a decline of 23,000 in July, while the unemployment rate is projected to remain at 4.1%