U.S. Labor Market Growth Slows in August as Only 54,000 Jobs Are Added, ADP Says
The U.S. private sector grew much slower in August. The report from payroll processor ADP shows the economy added only 54,000 jobs. This is well below what many economists had forecast. It also shows more worry about the job market in the coming months.
Key Report Points:
- Private payrolls grew by 54,000 jobs in August. Economists had expected 75,000 jobs, as seen in a survey by Dow Jones.
- The growth in August is much lower than July’s revised increase of 106,000.
- Job gains varied. Some fields lost jobs while others added a few.
Breaking Down the Sectors
Some fields showed clear weakness:
- Trade, Transportation, and Utilities lost 17,000 jobs.
- Education and Health Services dropped by 12,000 jobs.
- In contrast, Leisure and Hospitality added 50,000 jobs. This suggests that roles with direct customer contact still have high demand.
Wage Trends Stay Stable
Even with slow hiring, wages did not change much:
- Workers who kept their jobs earned about 4.4% more over the year.
- Workers who changed jobs earned about 7.1% more during the same period.
What May Cause the Slowdown
ADP’s chief economist, Nela Richardson, said, "The year started with strong job growth, but that strength is now shaken by doubt." Many point to high consumer worries, ongoing worker shortages, and issues brought by new tech as reasons for the slow pace.
More Concerns About the Labor Market
The ADP report adds to the growing list of signs that the job market is facing trouble:
- Initial jobless claims climbed to 237,000. This is 8,000 more than before and higher than predictions.
- The government’s Job Openings and Labor Turnover Survey (JOLTS) showed some of the lowest job openings since 2020 as of July.
These facts hint that employers are more careful with hiring when the future is uncertain.
Market and Federal Reserve Views
The weak job numbers have affected financial markets. Traders now expect the Federal Reserve to cut interest rates in its September meeting. The CME’s FedWatch tool now shows a 97.4% chance of a rate cut, up from 96.6% the day before.
Looking Ahead: The September Jobs Report
Attention now shifts to the official U.S. government report coming Friday morning. Economists predict that around 75,000 non-farm payroll jobs will be added in August. This number matches the revised job gain in July. The unemployment rate might also rise a bit to 4.3%, up from 4.2% in July.
These numbers will play a key role in how people view future economic growth and in the decisions on monetary policy.
The slow job growth in the labor market highlights the many challenges in the U.S. economy. Some fields show strength, while others seem to weaken. This mixed picture comes at a time when the country faces changes brought about by new technology and ongoing concerns about the economy.
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