August Job Growth Slows: U.S. Adds Only 54,000 Jobs, ADP Reports

U.S. private sector hiring fell short in August, signaling issues in the labor market. According to ADP, about 54,000 jobs were added, which is below the expected 75,000. This drop is a significant slowdown from July’s revised gain of 106,000.

Nela Richardson, ADP’s chief economist, pointed out that uncertainty is affecting job growth. Consumer worries, labor shortages, and disruptions from artificial intelligence are all contributing factors.

Certain industries struggled in August. Trade, transportation, and utilities lost around 17,000 jobs. Education and health services also took a hit, dropping 12,000 positions. Conversely, the leisure and hospitality sectors thrived, adding 50,000 jobs.

Wage growth remained steady. Those who stayed in their jobs saw a 4.4% increase in pay compared to last year, while job changers enjoyed a 7.1% rise.

Adding to the concern, jobless claims rose to 237,000, up 8,000 from the previous week. The Job Openings and Labor Turnover Survey also indicated one of the lowest job openings since 2020.

As attention shifts to Friday’s important jobs report, economists anticipate 75,000 non-farm payrolls and predict an uptick in unemployment to 4.3%. These labor market worries have led traders to bet that the Federal Reserve may cut interest rates later this month. Currently, there’s a 97.4% likelihood of a rate cut, according to the CME’s FedWatch tool.

For context, job growth at the start of the year was robust, illustrating how quickly conditions can change. As we adapt to new economic realities, staying informed and responsive is key.

For more details on job market trends, you can check recent reports from sources like the Bureau of Labor Statistics.

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