US private payrolls fell below expectations in August – ADP

Hiring in US private sector rose below expectations in August, adding to growing concerns about slowdown in the US labor market.

The ADP National Employment Report showed that private sector added 54,000 jobs last month, compared to 106,000 increase in July (upwardly revised from 104,000) and strongly disappointed expectations for increase in private hiring by 73,000

The ADP private sector payrolls report comes ahead of the more comprehensive nonfarm payrolls, due to be released on Friday, which will complete the picture of the situation in the US labor sector in August.

The data released in past couple of months signal that labor market is softening, with strong drop in new jobs opening and private hiring in August, contributing to growing warning signals, along with the sharp rise in layoffs (August figure was the highest since 2020) and higher number of unemployed people than positions available.

Economists see import tariffs and an immigration crackdown as the main reasons for the sector’s slowdown, though there are other factors behind this problem.

US nonfarm payrolls are expected to add 75,000 jobs in August, almost unchanged from 73,000 in July, unemployment is expected to tick up to 4.3% in August from 4.2% previous month, while average hourly earnings are expected to remain unchanged at 0.3%.

Persistent weakness in US labor sectors adds pressure on the US central bank to start cutting interest rates, which have been unchanged since December.