August private payrolls rose by 99,000, ADP reported. This represents their lowest gain since 2021 and far less than estimated growth figures.

As long as they keep on going..!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Private sector payroll growth slowed considerably over the last three and half years in August, signaling further weakening of labor markets according to ADP data. Companies hired just 99,000 workers for August compared with 111,000 recruited during July (which itself was revised downward), falling well short of forecast expectations of 140.000 new jobs being created during this month alone by Dow Jones analysts and experts. It marked August’s lowest pace since January 2021 according to this payrolls processing firm’s research. Professional and business services contracted 16,000, manufacturing fell 8,000 jobs, and information services contracted by 4,000. However, Labor Department data helped allay fears of widespread layoffs as initial claims for unemployment benefits decreased slightly to 227,000 for the week ended August 31 – below consensus forecast of 229,000 claims for unemployment benefits – on an upside note, education and health services added 29,000 workers while construction up 27,000 with other services adding another 20,000. Financial activities experienced a net gain of 18,000 and trade, transportation and utilities saw gains of 14,000. When broken down by size categories of employer (fewer than 50 workers vs between 50-499 workers ), firms with under 50 workers reported losses while larger ones showed increases of 68,000 workers. Wages continued their climb upwards but at an increasingly gradual pace than seen earlier gains. Annual pay rose 4.8% among workers who remain employed since July, according to ADP’s count of ongoing jobs, similar to what happened last month. Now this count provides context for Friday’s nonfarm payroll report from BLS, and many are closely monitoring that report’s release. While these reports often differ greatly, their predictions were almost perfectly in sync for July. The consensus forecast predicts payrolls to have grown by 161,000 following July’s 114,000 increase and unemployment dropping slightly to 4.2%; though recent developments could create some risk in this estimate. Private payroll growth was only 97,000 according to the Bureau of Labor Statistics in July; markets anticipate this weak employment data will prompt the Federal Reserve to lower interest rates at their September 17-18 meeting. Main question for Fed: how quickly and aggressively to move. Current market pricing suggests at least a quarter percentage point cut at this month’s meeting and up to one full percentage point by end of 2024. ADP reported it conducted rebenchmarking its data using Quarterly Census of Employment and Wages data which resulted in the reduction of 9,000 jobs between April 2023 to March 2024; similar adjustments from BLS showed nonfarm payrolls had overcounted by 818,000. ADP will conduct full year adjustments beginning February 2025.