ADP reports private-sector employment rose by 38,000 jobs in August

The payroll processing company ADP reported that private-sector employment grew by 38,000 jobs in August, a figure that falls short of economists’ estimate of 48,000 and is down from the revised 46,000 jobs added in July. The increase marks the smallest monthly gain since January.

Education and health services led hiring with 45,000 new positions, followed by leisure and hospitality (16,000) and financial activities and other services (each 6,000). Manufacturing shed 17,000 jobs and professional and business services lost 16,000. Natural resources and mining, trade and transportation each shed 5,000 jobs, while information lost 4,000.

Large firms with 500 or more employees added 34,000 jobs, while firms with 50-499 employees saw no net change and those with fewer than 50 employees added 3,000.

Pay growth also diverged: workers who stayed in their jobs saw wages rise 4.4% year over year, whereas those who changed jobs experienced a 7.3% increase.

"Pay can tell us a lot about today's choppy hiring," ADP chief economist Nela Richardson said. "To understand hiring patterns, you have to look deeply into where pay growth is accelerating, where it's slowing, and for whom. Once-predictable wage growth has been overtaken by the complexities of demographic change, persistent inflation, and AI's effects on jobs."

ADP's data precede the Labor Department's monthly employment report, which is expected to show a gain of 56,000 jobs and an unchanged unemployment rate of 4.1%.