ADP Employment Increase Weakens in August; Pay Growth Remains Moderate
by:Tom Moeller
|in:Economy in Brief
Summary
- Latest job gain is less-than-half its March 2024 high; factory jobs decline for fourth straight month.
- Service-sector slowdown is broad-based. Construction job growth slows.
- Wage growth for “job stayers” stabilizes y/y.
The ADP National Employment Report indicated that nonfarm private sector payrolls rose 99,000 (1.3% y/y) during August following a 111,000 July increase, revised from 122,000. June’s rise of 155,000 was unrevised. It was the weakest increase since January 2021, down from the most recent high of 211,000 in March of this year. A 148,000 rise in ADP employment had been expected in the Action Economics Forecast Survey.
Growth in median annual pay for "job stayers" held at 4.8% y/y in August. It remained the weakest growth since July 2021 and well below a September 2022 high of 7.8% y/y. Pay increases in education & health services of 5.1% y/y compared to a high of 7.3% in October 2022 while construction sector earnings rose a diminished 5.2% y/y. Manufacturing pay growth averaged a steady 4.7% y/y and leisure & hospitality rose a diminished 4.9% y/y. Professional & business services pay grew a lessened 4.7% y/y. Pay increases for “job changers” averaged a steadied 7.3% y/y last month, remaining well below the 16.4% y/y peak in June 2022.
Small business hiring (less than 50 employees) declined 9,000 (+0.2% y/y) last month after easing 1,000 in July. Employment at medium-sized firms (50-499,000 employees) rose 68,000 (1.8% y/y) after a 60,000 July increase. These gains stood below the March high of 113,000. Large business hiring (500+ employees) rose 42,000 (2.7% y/y) during August following a 52,000 July gain. It remained the smallest increase since January.
Goods-producing employment rose 27,000 last month (1.0% y/y) after a 30,000 July rise. The number of construction sector jobs rose 27,000 (3.6% y/y) following a 31,000 July increase. Hiring in the manufacturing sector fell 8,000 (-0.1% y/y) last month, the fourth consecutive monthly shortfall. Natural resource & mining hiring improved 8,000 (-1.9% y/y) after a 2,000 rise in July.
The number of service-producing jobs rose 72,000 (1.4% y/y) in August following an 81,000 July gain. Leisure & hospitality employment rose 11,000 (2.0% y/y) after improving 10,000 in July and education jobs gained 29,000 (2.3% y/y) following a 66,000 July increase. The number of jobs in trade, transportation & utilities increased 14,000 last month (0.9% y/y) following a 46,000 July gain. Employment in “other” services rose 20,000 (3.3% y/y) after increasing 16,000 in July. Moving lower, professional & business services employment declined 16,000 (+0.1% y/y) after falling 47,000 while information employment fell 4,000 (-1.8% y/y), the fifth consecutive monthly decline.
The ADP National Employment Report and Pay Insights data can be found in Haver's USECON database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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