Private Employment Grows By 99,000 In August, Sharply Misses Forecasts Of 140,000: 'The Labor Market Overall Is Softening'

Private sector job growth cooled August compared to the previous month and came in at a substantially slower pace than economists estimated.

U.S. private employers added 99,000 jobs in August, a decline from the downwardly revised 111,000 in July, and falling short of the anticipated 140,000.

The ADP data offers a relevant preview of the official August jobs report scheduled for release at 8:30 a.m. ET Friday. Economists are predicting nonfarm payrolls will rise from 114,000 in July to 160,000 in August.

August ADP National Employment Report: Key Highlights

• Services-providing companies added 72,000 jobs, while goods producers added 27,000.
• Industries experiencing the highest increases in employment were construction (+27,000) and education/health services (+29,000).
• Industries registering job losses during the month were professional/business services (-16,000), manufacturing (-8,000) and information (-4,000).
• Year-over-year pay increases for job-stayers were 4.8% in August, unchanged from July, which represents the slowest pace in three years. Pay gains for those who switched jobs slightly edged up from 7.2% to 7.3%.
• “The job market’s downward drift brought us to slower-than-normal hiring after two years of outsized growth. The next indicator to watch is wage growth, which is stabilizing after a dramatic post-pandemic slowdown,” said Nela Richardson, chief economist at ADP.

Weekly Unemployment Claims Update

The government released its weekly unemployment benefits report for the period ending Aug. 31 on Thursday.

Here are the key takeaways:

• Initial jobless claims totaled 227,000, a decrease of 5,000 from the prior week and just below the forecast of 230,000.
• The four-week average of jobless claims, which smooths out weekly fluctuations, edged down from 231,750 to 230,000, slightly under the expected 229,000.
• Continuing jobless claims dropped from 1.86 million to 1.838 million, better than the projected 1.87 million.

Job Cuts On The Rise

In a separate report released Thursday, global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc. said U.S.-based employers announced 75,891 job cuts in August — a staggering 193% jump from the 25,885 cuts reported in July.

"August's surge in job cuts reflects growing economic uncertainty and shifting market dynamics. Companies are facing a variety of pressures, from rising operational costs to concerns about a potential economic slowdown, leading them to make tough decisions about workforce management," said Andrew Challenger, the company’s senior vice president.

The technology sector alone announced 39,563 job cuts last month, the most since January 2023, bringing the total for the year to 105,426.

According to Challenger, Gray & Christmas tracking, announced hiring plans have dropped to the lowest year-to-date total since the firm began tracking them in 2005.

“The labor market overall is softening,” the report said.

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