- ADP report on private payrolls shows 374,000 jobs added in August, well below a Dow Jones expectation of 600,000
- Leisure and accommodation jobs continue to account for the bulk of new positions
- The report is often seen as a preview of a Labor Department jobs report, though different survey methodologies have sometimes resulted in considerably different figures
Summary by Dirk Langeveld
Hiring by private nonfarm companies sharply missed expectations in August, according to a recent report by the payroll services company ADP.
Private payrolls increased 374,000 in August, falling short of a Dow Jones estimate of that they would see a net gain of 600,000 positions. Small businesses with fewer than 50 employees accounted for 86,000 jobs, with midsize companies of 50 to 499 employees adding 149,000 positions and larger companies adding 138,000.
The data could indicate a weaker monthly jobs report from the Labor Department on Friday, although the agencies have sometimes shown considerably different numbers due to different survey methodologies. For example, the Labor Department reported 703,000 new jobs in July against the 330,000 logged by ADP.
- 329,000 jobs were added in the service-providing sector and 45,000 in the goods-providing sector
- Leisure and hospitality accounted for the bulk of the job growth, adding 201,000 positions; this was followed by a net gain of 59,000 jobs in education and health as well as 30,000 in construction
- ADP says job growth has slowed considerably following a rapid expansion in the first half of the year; nearly 4 million jobs have been added in 2021, but the tally is still down 7 million compared to pre-pandemic numbers
- The spread of the COVID-19 Delta variant is likely contributing to the slowdown in economic recovery, though consumer confidence indices have also waned as factors like inflation and the impending end of supplemental unemployment benefits cause consumers to rein in spending
- Dow Jones economists are predicting an increase of 720,000 jobs in Friday’s report