US private payrolls increase 99,000 last month, lower than market expectations
(MENAFN) In August, US private payrolls increased by 99,000, a figure significantly lower than market expectations, according to a report released by the ADP Research Institute. This marked the smallest rise in payrolls since January 2021 and fell short of the anticipated 144,000. The slowdown in job creation comes as the labor market continues to cool, reflecting a broader trend of declining hiring activity among private employers. Furthermore, the July payroll numbers were revised downward from an initial gain of 122,000 to 111,000, highlighting the ongoing moderation in labor market growth.
The report emphasized that the US labor market has been gradually softening, with job creation slowing for the fifth consecutive month. Nela Richardson, ADP's chief economist, noted that the hiring pace has decelerated after two years of rapid expansion. She explained that the current trend suggests a return to more normalized levels of job growth, following an extended period of unusually strong hiring due to the post-pandemic recovery. Richardson also pointed out that wage growth, a key indicator to monitor, is stabilizing after experiencing a sharp slowdown in the aftermath of the pandemic.
The report provided insights into job growth across different business sizes and sectors. Small businesses, in particular, struggled in August, losing 9,000 jobs, while mid-sized enterprises saw a gain of approximately 68,000 jobs, and large companies added 42,000 jobs. Education and health services emerged as the top-performing sectors, adding 29,000 jobs, while the construction industry also saw robust growth, increasing by 27,000 jobs. Other notable gains were recorded in financial activities, which added 18,000 jobs, trade, transportation, and utilities with 14,000 jobs, and leisure and hospitality with 11,000 jobs.
On the other hand, certain sectors experienced notable job losses. Professional and business services faced the most significant decline, shedding 16,000 jobs, while the manufacturing industry lost 8,000 jobs, and the information sector saw a reduction of 4,000 jobs. Meanwhile, industries such as natural resources and mining saw modest job additions of 8,000, and other services contributed 20,000 jobs to the total. Overall, the report reflects the ongoing cooling of the US labor market, with hiring slowing across a range of industries as employers adjust to changing economic conditions.
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