The private sector added 132,000 jobs in August, an indication that the white-hot pace of hiring could be slowing after months of strong job growth.
The August number is far below economists’ expectations of 225,000 positions added.
“We could be at an inflection point, from super-charged job gains to something more normal,” ADP chief economist Nela Richardson said in a statement.
ADP also said annual pay rose by 7.6% — the first time its report has tracked pay, which it said will encompass gross earnings inclusive of tips, commissions and bonuses. The number indicates a higher rate of wage inflation than has been previously tracked — an implication that would suggest inflation is becoming embedded into employee compensation.
This is the first monthly employment report from ADP after announcing a pause in May. The payroll processing giant adopted new methodology that aims to give economists and policymakers better visibility into labor market movement.
The ADP Research Institute partnered with the Stanford Digital Economy Lab on the new employment reports, which the company said will use “fine-grained, high-frequency data” that will provide a “richer and more useful analysis” of the US job market, including a more granular look at employment by industry, establishment size and location by census region. ADP handles payroll transactions for more than 25 million workers.
The ADP report is published two days ahead of the government’s official job report from the Bureau of Labor Statistics and at times, the two numbers have diverged significantly. While statisticians have formulas to mitigate the effects of seasonality on sector-specific fluctuations — such as retailers shedding jobs in January after the post-holiday shopping season — the distortions created by the pandemic posed an unprecedented challenge.
Economists expect Friday’s BLS report to show that 300,000 jobs were added to the economy in August, according to Refinitiv.
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