U.S. Private Sector Hiring Eased Considerably in August, ADP Says

By Joshua Kirby

Hiring among U.S. private-sector employers slowed more than expected in August and wage growth eased to its lowest level in nearly two years, pointing to an increasingly cool labor market.

Employment in the nonfarm private sector increased by 177,000 jobs, easing from the 371,000 jobs added in July, according to data from the ADP National Employment Report released Wednesday. Economists polled by The Wall Street Journal had expected an increase of 200,000 jobs.

July's figure was revised upward from a previous estimate of 324,000 jobs added.

Annual wage growth stood at 5.9% in August from 6.2% in July, reaching the lowest rate of growth since October 2021, according to the ADP survey. All 50 states plus Washington, D.C., recorded slower growth in wages, ADP said. Pay data is based on the salaries of almost 10 million individual employees over a 12-month period.

"After two years of exceptional gains tied to the recovery, we're moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede," said Nela Richardson, the ADP's chief economist.

The slower pace of job creation was largely down to an easing of hiring in the leisure and hospitality sector, which added just 30,000 jobs in August compared with more than 200,000 the previous month.

Small and medium-sized businesses added 18,000 and 79,000 jobs, respectively, while large businesses added 83,000, the survey showed.

By region, the most jobs were gained in the South, with 119,000, and the Northeast, with 59,000. The Midwest lost 15,000 jobs, by contrast.

Goods producers added 23,000 jobs, with 6,000 new payrolls in construction and 5,000 in natural resources and mining. Manufacturing jobs increased by 12,000.

The ADP estimate is based on aggregated payroll data of more than 25 million U.S. workers and is independent from U.S. Labor Department official data. The ADP series can diverge considerably from the Labor Department's data.

Write to Joshua Kirby at [e-mail]; @joshualeokirby

(END) Dow Jones Newswires

August 30, 2023 08:58 ET (12:58 GMT)

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