Private sector employers added only 132,000 jobs in August, badly missing expectations and indicating that businesses are growing more concerned about mixed signals coming from the American economy.
The August figure was down from 268,000 jobs added in July and 480,000 in June. The new number was part of the August ADP National Employment Report produced by the ADP Research Institute in collaboration with the Stanford Digital Economy Lab.
— ADP Research Institute® (@AdpResearch) August 31, 2022
ADP chief economist Nela Richardson said that the firm’s data “suggests a shift toward a more conservative pace of hiring.” She added that the numbers could indicate the economy is “an inflection point, from super-charged job gains to something more normal.”
Wages in August were up 7.6% compared to August 2021. A year ago the annual wage increase was around 2%. Workers who stayed in their current jobs saw an annual wage increase equal to the overall average of 7.6%, while those who changed jobs in the last month experienced an average wage increase of 16.1%.
ADP has modified its reporting methodology and has ceased forecasting the government’s employment data that will be released on Friday. However, government economists have issued a forecast of 318,000 new jobs added in August.
Private sector economists surveyed by Redinitiv had predicted 288,000 new jobs in August.
The ADP report indicated that the highest rate of job growth in August came from the largest firms. Every U.S. region saw a positive job growth number except for the Midwest.
The leisure and hospitality, trade, and transportation sectors saw the most growth in the last month.
Wednesday’s ADP jobs report is part of other key employment figures released this week, especially Tuesday’s report that overall job vacancies in the U.S. in July shot up to 11.24 million. That is around twice the number of Americans listed as unemployed and seeking a job.
The extremely tight labor market is causing widespread concern that even larger wage increases are going to be needed to pull Americans back into employment. A spike in wages designed to induce people to go back to work is expected to directly fuel even higher inflation than the 8.5% annual figure currently hammering almost all Americans.