US private sector employers added fewer than 100,000 jobs in August, ADP said Thursday.
The 99,000 headline print was the first sub-100,000 reading since January of 2021, the month after the government’s nonfarm payrolls headline last printed in negative territory.
The ADP readout was below every estimate. The range, from two dozen economists, was 105,000 to 170,000.
The prior month’s headline, already the weakest since January, was revised lower to 111,000 from 122,000. Between that revision and August’s print, the three-month moving average is now 121,667, the lowest since November and the second-lowest in four years.
Hiring was markedly weak among smaller employers. Those with fewer than 50 employees shed 9,000 jobs in August on net. By industry, manufacturing lost 8,000 jobs, information 4,000 and business services 16,000. Leisure and hospitality hiring was very weak at just 11,000.
August marked the fifth straight month during which the pace of private payroll growth slowed. “The job market’s downward drift brought us to slower-than-normal hiring after two years of outsized growth,” ADP chief economist Nela Richardson said Thursday. “The next indicator to watch is wage growth, which is stabilizing after a dramatic post-pandemic slowdown.”
ADP’s “pay insights” figures showed pay growth for job “stayers” was steady at 4.8% in August. Job “changers” saw pay gains of 7.3%.
The gap between the two — conceptually the reward for “switching” — remained at 2.5ppt.
The latest JOLTS release showed the quit rate ticked higher in July, but from post-pandemic lows. The Fed’s counting on wage growth not returning to the fore as a source of domestic price pressures.
Meanwhile, Challenger, Gray & Christmas said job cut announcements rose sharply last month, to 75,891.
That was the largest August total since 2009.
“August’s surge in job cuts reflects growing economic uncertainty and shifting market dynamics,” Andrew Challenger said, adding that US employers have announced 79,697 hiring plans so far in 2024, down dramatically from January-August in 2023.
The YTD total for hiring plans “is the lowest since Challenger began tracking in 2005,” the release noted.
