The latest report from ADP highlights a concerning trend in the US labor market, indicating a slowdown during the summer months. According to ADP’s private payrolls report for August, only 54,000 new jobs were added in the private sector, falling short of expectations of 73,000 and significantly lower than the 106,000 jobs created in July.
The leisure and hospitality sector led the way in job creation, contributing 50,000 new positions, while the construction industry also saw decent growth with 15,000 new jobs. However, not all sectors fared well; the transportation and utilities sector experienced the steepest job losses, shedding 17,000 positions. Education and health services were also impacted, losing 12,000 jobs compared to the previous month.
Nela Richardson, ADP’s chief economist, commented on the shift in labor market dynamics, stating that early-year momentum has been “whipsawed” by growing uncertainty surrounding the economy. She identified several potential factors contributing to the hiring slowdown, including persistent labor shortages, consumer hesitance, and the disruptive influence of artificial intelligence.
This report comes just a day before the government’s monthly jobs report is slated for release, a report that now bears watching due to the recent significant revisions made to employment data for May and June. This adjustment led to political fallout, including President Trump’s decision to dismiss the head of the Bureau of Labor Statistics, the agency responsible for compiling the data. As a result, both policymakers and economic analysts are keenly awaiting how the upcoming jobs report may align with or diverge from ADP’s findings, further impacting perceptions of the current economic climate.
