U.S. Added 99,000 Private Jobs in August, Lowest Growth Since 2021

On September 5, the ADP Employment report revealed that the U.S. economy added only 99,000 private non-farm jobs in August. This figure marks the weakest job growth since the pandemic began and falls significantly short of Wall Street economists’ expectations.

According to the ADP data, this new tally is down by 2,000 jobs from the previously adjusted total of 111,000 for July. Analysts at Dow Jones had forecasted that 140,000 private jobs would be created in August, indicating a considerable miss in predictions.

This month’s jobs growth is the lowest reported by ADP since January 2021, coinciding with speculation that the Federal Reserve may soon lower interest rates for the first time in over a year. Another report from the Labor Department is set to be released on Friday, which could provide additional context.

Nela Richardson, ADP’s chief economist, commented on the state of the job market, stating, “The job market’s downward drift brought us to slower-than-normal hiring after two years of outsized growth.” She also highlighted that wage growth is stabilizing following a significant slowdown post-pandemic, which will be essential to monitor moving forward.

Breaking down the sectors, the education and health services sector was responsible for the most job additions, contributing 29,000 positions. The construction sector also saw positive growth, adding 27,000 jobs. Conversely, the professional services sector suffered a loss of 16,000 jobs in August, while manufacturing experienced a decline of 8,000 jobs.

When looking at business sizes, small businesses—defined as those with fewer than 50 employees—saw a decrease of 9,000 jobs. In contrast, medium-sized companies, which employ between 50 and 499 personnel, accounted for 68,000 new jobs, while large businesses with 500 or more employees contributed 42,000 jobs to the total.

In terms of wage growth, ADP reported that employees who changed jobs experienced an annual paycheck increase of 7.3%. Meanwhile, those who remained in their positions saw an increase of 4.8%, maintaining a steady trajectory similar to the previous month.

As the job market continues to shift, all eyes will be on upcoming reports that will shed light on prevailing trends and inform future monetary policy decisions.