Companies added jobs at a more moderate pace in August, underscoring a stable labor market.
Private payrolls rose 38,000 after a revised 46,000 increase in the prior month, according to ADP Research data out Wednesday. The median forecast in a Bloomberg survey of economists expected a 47,000 gain.
The figures indicate that employers are still hiring, albeit at a slower pace than in the spring. The August increase was the smallest since the start of the year.
The report showed hiring was driven by education and health services, followed by leisure and hospitality as well as construction. Manufacturing payrolls dropped. The majority of hiring was at businesses with 500 or more employees, according to ADP.
Job creation has been uneven this year but the unemployment rate is historically low, according to separate government data. That has reassured some Federal Reserve officials that the labor market is in balance, allowing them to focus more of their attention on inflation.
Fed Chairman Kevin Warsh last week acknowledged some pockets of concern but said the labor market overall is consistent with full employment.
“When labor supply is barely growing, monthly job gains are naturally going to run low,” Warsh said in a speech at the Fed’s annual conference in Wyoming. “In general, though, people who want to work, by and large, are holding or finding jobs.”
Immigration restrictions, declining birthrates and an aging population have combined to curtail US labor-force growth.
Worker Pay
The ADP report, published in collaboration with the Stanford Digital Economy Lab, also showed workers who changed jobs saw a 7.3% increase in their gross pay from a year earlier, a deceleration from the prior month.
Gross wage growth for those who stayed put rose 4.4%, unchanged from the prior month. ADP also calculates base pay, which excludes bonuses, commissions and tips. Those figures painted a similar picture.
ADP data on worker pay are now available for 56 metropolitan areas and across demographics, sectors and establishment size.
The government’s employment report due Friday, which also includes public-sector hiring, is expected to show a 55,000 increase in total payrolls in August. That would mark a turnaround from July, when nonfarm employment fell 23,000.
Sparshott writes for Bloomberg.
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