US August ADP Private Employment Up 38,000...Lowest Increase Since January

Smallest Increase in Seven Months Due to Manufacturing Slump

Hiring Slows and Wage Growth Also Cools

The pace of private sector employment growth in the United States slowed further in August. As jobs decreased in industries such as manufacturing and professional and business services, the increase in private employment fell to its lowest level since January.

A worker is stocking products at a supermarket located in New York. New York (USA) - Photo by Yoonju Hwang

US employment information firm Automatic Data Processing (ADP) announced on the 2nd (local time) that private sector employment in the United States increased by 38,000 in August compared to the previous month. The increase in August was the smallest in seven months since January and also fell short of the market forecast of 47,000 compiled by The Wall Street Journal (WSJ). The July figure was revised up from the previous 44,000 to 46,000.

The employment trend varied by industry sector. In the service sector, 48,000 jobs were added, while in the goods-producing sector, there was a decrease of 10,000 jobs.

The education and health services sector led overall employment growth with an increase of 45,000 jobs. Leisure and hospitality added 16,000 jobs, and construction rose by 12,000. Financial activities and other services each saw an increase of 6,000 jobs.

By contrast, manufacturing employment declined by 17,000. Professional and business services also saw a decrease of 16,000; trade, transportation, and utilities dropped by 5,000; information by 4,000; and natural resources and mining each decreased by 5,000.

By company size, large enterprises were responsible for most of the employment growth. Companies with 500 or more employees increased their employment by 34,000. Mid-sized companies with 50 to 499 employees saw no change from the previous month, while small businesses with fewer than 49 employees added only 3,000 jobs. Notably, companies with 20 to 49 employees saw employment decline by 17,000.

The trend in wage growth also showed signs of moderation. According to ADP’s newly expanded and revised wage indicators this month, the base pay for all private sector workers increased by 3.2% compared to the same month last year, and gross pay—including bonuses, commissions, and tips—rose by 4.7%.

The base pay growth rate for employees who stayed in their jobs was 3.0%, unchanged from the previous month, while for those who changed jobs, the base pay growth rate was 4.7%. In terms of gross pay, employees who remained with their employers saw a 4.4% increase, the same as last month, but the growth rate for job changers declined from 7.5% to 7.3%. ADP explained that the overall wage growth rate has slowed over the past four years.

Nela Richardson, Chief Economist at ADP, stated, “Pay tells us a lot about today’s choppy employment situation. To understand employment patterns, we need to closely examine where wage growth is accelerating, where it is slowing, and who is experiencing these changes.”

She added, “The once predictable trend of wage growth has been replaced by complex factors such as demographic changes, persistent inflation, and the impact of artificial intelligence (AI) on jobs.”

This content was produced with the assistance of AI translation services.