August hiring was tepid as jobs report looms
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Private employers added jobs at a tepid rate last month, ADP said, as economists await Friday's release of the official government employment data for August.
Why it matters: The ADP data adds to the evidence that a surge in the job market this spring gave way to more moderate expansion over the summer.
Driving the news: The payroll processing company reported that 38,000 jobs were added in August, the lowest since January and below forecasters' expectations. It was also lower than the revised 44,000 added in July.
- The strongest gains, as has often been the case in recent years, were in education and health services (45,000 jobs added) and leisure and hospitality (up 16,000).
- Laggard sectors included manufacturing (down 17,000 jobs) and professional and business services (down 16,000).
What they're saying: "If you want to look for places of disappointment, [manufacturing] is the one I would point to," ADP chief economist Nela Richardson said in a call with reporters.
- "It's kind of retreated back to its long-term job loss instead of job creation," she said. "So we're going to be watching that sector to see if this is the reversion back to a declining trend after a few months of at least a little bit of positivity."
What's next: The Labor Department's August employment situation report, due out at 8:30am ET Friday, is expected to show 53,000 jobs added, reversing a July payroll slump.
- Forecasters expect the unemployment rate to be unchanged at 4.1%.
Between the lines: Federal Reserve officials have described the labor market in recent months as broadly healthy, and instead focused on inflation data as they weigh whether to raise interest rates.
- Still, if payroll and unemployment numbers come in weak, it would give some officials pause about a new effort to tighten policy. Conversely, a more robust August reading would solidify the case for higher rates at the Federal Open Market Committee's policy meeting concluding Sept. 16.
