The private sector added only 54,000 jobs last month, payroll giant ADP reported Thursday, as the job market showed further signs of a slowdown.
The service-providing sector added 42,000 jobs in August, including 15,000 in professional and business services such as accounting and tax preparation. The financial activities sector, which includes banking, lost 2,000 jobs, however. The goods-producing sector added 13,000 jobs, including 16,000 in construction, but lost 7,000 in manufacturing. Small businesses with between one and 19 employees added 10,000 jobs, while businesses with between 20 and 49 employees gained 2,000. Medium establishments with between 50 and 249 employees added 18,000 jobs while those companies with between 250 and 499 employees gained 7,000. Large establishments with 500 employees or more added 18,000 jobs.
“Overall, we’re seeing employers having to navigate a lot of uncertainties and an aging workforce, which will pop up as labor shortages in some industries, and the effects of new technology that is being incorporated,” said ADP chief economist Nela Richardson during a conference call Thursday with reporters. “All these things added together, depressed the hiring in August to 54,000.”
Year-over-year pay growth was 4.4% for workers who stayed in their jobs, and 7.1% for those who changed jobs. In professional and business services, the annual rate for job stayers was 4.2%.
“We’re still seeing wage growth, both for job stayers and job changers, at elevated levels stay stabilized,” said Richardson. “They’re certainly down from the high point of the pandemic recovery, but they’re much higher than they were before the pandemic.”
However, she added that ADP is seeing a decrease in average hours worked, especially when compared to before the pandemic. “There is a sense that in this no hire, no fire labor market that employers are really looking at hours as that lever to change overall pay costs and wage costs,” said Richardson. “Workers are, on average, working less now than they did five years ago, and we’ve seen in academic research that employers are more likely to cut hours at first than jobs.”
