
Key takeaways:
- Job growth remained sluggish: BLS reported only 22,000 jobs added in August, continuing the pattern of weak employment gains seen since April.
- Small gains in the private sector: ADP showed more moderate growth with 54,000 private jobs added, driven by leisure/hospitality and construction.
- Labor market indicators show stability with concerns: Unemployment rose slightly to 4.3%, and long-term unemployment increased significantly, but wage growth remained steady at 3.7% annually.
Nonfarm payroll added 22,000 jobs in August, according to the latest report from the Bureau of Labor Statistics (BLS). This represents continued weakness from July’s revised figure of 79,000 (up from the previously reported 73,000) and June’s revised figure of -13,000 (down from 14,000). The net revisions mean employment in June and July combined is 21,000 lower than previously reported.
Most of the employment growth for August was in health care (+31,000) and social assistance (+16,000). Health care added jobs below its 12-month average of 42,000, with gains in ambulatory health care services (+13,000), nursing and residential care facilities (+9,000), and hospitals (+9,000). However, federal government continued to lose jobs (-15,000), now down 97,000 since January.
Professional and business services lost 17,000 jobs, with temporary help services cutting another 9,800 positions, continuing a persistent downward trend in this sector that has been a reliable indicator of broader labor market health.
Other highlights from the latest BLS report include:
- The unemployment rate edged up to 4.3% over the month, with 7.4 million people unemployed, representing a slight increase from 4.2% in July.
- The employment-population ratio remained unchanged at 59.6%, and the labor force participation rate increased by 0.1 percentage point to 62.3%.
- The number of people employed part time for economic reasons was at 4.7 million, showing little change.
- Long-term unemployment (27 weeks or more) rose by 104,000 to 1.9 million, now accounting for 25.7% of all unemployed people.
- New entrants to the labor force decreased significantly by 199,000 to 786,000.
- Average hourly earnings increased by 10 cents to $36.53, contributing to a 3.7% rise over the past 12 months.
Private employment adds 54,000 jobs
ADP’s National Employment Report showed private sector employment increased by 54,000 jobs in August, marking a significant slowdown from July’s revised gain of 106,000 jobs (up from the initially reported 104,000). This represents a substantial deceleration in hiring momentum.
“The year started with strong job growth, but that momentum has been whipsawed by uncertainty,” said Dr. Nela Richardson, chief economist at ADP. “A variety of things could explain the hiring slowdown, including labor shortages, skittish consumers, and AI disruptions.”
August gains were driven by service-providing sectors, which added 42,000 jobs, led by leisure and hospitality (+50,000) and professional/business services (+15,000). Goods-producing sectors contributed 13,000 jobs, with construction (+16,000) showing particular strength while manufacturing declined (-7,000).
Year-over-year pay gains remained stable in August, with job-stayers seeing 4.4% wage growth (unchanged from previous months) and job-changers experiencing 7.1% wage growth (up from recent levels). Pay growth has held relatively steady, suggesting continued resilience in worker compensation despite hiring fluctuations.