U.S. Private-Sector Employment Rises by Just 38,000, Falling Short of Market Expectations

【Financial News, New York — Correspondent Lee Byung-chul】The United States’ labor market slowdown is becoming increasingly evident. Private-sector employment growth in August fell below market expectations, reaching its lowest level since January. New jobs were concentrated in a few sectors, including health care, and at large companies. Employment declined sharply in manufacturing and professional and business services. As signs mount that the labor market, once a pillar of the U.S. economy, is cooling rapidly, attention is focused on the U.S. Department of Labor’s employment report due on the 4th.
According to ADP, a U.S. employment-data provider, private-sector employment increased by 38,000 in August from the previous month. That was 8,000 fewer than the upwardly revised increase of 46,000 in July and fell short of the market forecast of 47,000.
The August increase in private-sector employment was the smallest since January. Although employment continued to grow, analysts said the broader slowdown in the U.S. labor market had become more pronounced. Job gains were also excessively concentrated in a few sectors.
Education and health services added 45,000 jobs, leading overall employment growth. Health care, in particular, posted a notable increase. Leisure and hospitality added 16,000 jobs, while construction gained 12,000.
Excluding these sectors, however, the labor market actually contracted. Manufacturing lost 17,000 jobs during the month. Professional and business services shed 16,000. Natural resources and mining, as well as trade, transportation, and utilities, each lost 5,000 jobs.
The gap by company size was also significant. Large companies accounted for virtually all new hiring. Employment at companies with 500 or more employees increased by 34,000, accounting for about 90% of the total private-sector gain of 38,000. By contrast, employment at small businesses with fewer than 50 employees rose by just 3,000.
The market’s focus has now shifted to the August nonfarm payrolls report, which the Bureau of Labor Statistics (BLS) under the U.S. Department of Labor will release on the 4th. The market expects nonfarm payroll employment, which fell by 23,000 in July, to increase by 53,000 in August. The unemployment rate is projected to remain at 4.1%.




[email protected] Correspondent Lee Byung-chul Reporter