Private employers added just 38,000 jobs in August, falling well short of what economists expected and marking the weakest month of hiring so far this year, according to payroll processor ADP.
The August figure came in below the upwardly revised 46,000 jobs added in July and missed the Dow Jones consensus estimate of 47,000. Economists polled by Bloomberg had also projected a gain of 47,000. ADP released the data Wednesday.
Nearly all of August's gains came from a small number of sectors. Education and health services led all categories with 45,000 new jobs. Leisure and hospitality added 16,000, and construction was up 12,000. Most other sectors either held flat or lost ground.
Manufacturing shed 17,000 jobs during the month. Professional and business services fell by 16,000. Natural resources and mining, along with trade, transportation, and utilities, each reported declines of 5,000.
The gains were also heavily concentrated by company size. Businesses employing 500 or more workers accounted for 34,000 of the new positions. Companies with fewer than 50 employees added just 3,000.
On the wage side, base pay for workers who stayed in their jobs rose 3% from a year ago, while gross pay, which includes tips, commissions, and bonuses, increased 4.4%. Both figures were unchanged from July. Job switchers saw stronger numbers, with base pay up 4.7% year over year.
There is "still some opportunity to boost wages by changing jobs, even in this low fire, low hire job market," ADP chief economist Nela Richardson said.
The ADP report comes two days before the Bureau of Labor Statistics releases its official August jobs data on Friday. That government report covers both public and private sector employers. Economists expect it to show a gain of around 53,000 to 55,000 jobs, following a decline of 23,000 in July. The unemployment rate is forecast to hold at 4.1%.
ADP's monthly report is widely watched as an early indicator of overall labor market conditions, though its figures do not always align closely with the government's official count.
