Private US companies added far fewer jobs than expected in August, with hiring concentrated in a small number of sectors and declining across several others.
Payrolls processing firm ADP reported that private employers added 38,000 workers during the month, down from an upwardly revised 46,000 in July and below the Dow Jones consensus estimate of 47,000.
August marked the slowest month of job creation since January, reinforcing concerns about a broader cooling in the US labour market.
Three sectors accounted for the bulk of hiring, leaving much of the economy showing little to no employment growth during the period.
Education and health services led all categories with 45,000 new positions added, with health care in particular continuing to drive employment gains across the broader economy.
Leisure and hospitality contributed 16,000 jobs while construction added 12,000, rounding out the narrow group of industries carrying the weight of August’s growth.
Manufacturing was among the hardest-hit sectors, shedding 17,000 jobs during the month, while professional and business services shed 16,000 positions.
Natural resources and mining as well as trade, transportation and utilities each reported declines of 5,000, pointing to widespread weakness beyond the few growing sectors.
The gains were heavily skewed toward larger employers, with companies of 500 or more workers adding 34,000 jobs while those with fewer than 50 employees added just 3,000.
On pay, ADP reported that base pay for job-stayers rose 3% from a year ago while gross pay, which includes tips, commissions and bonuses, increased 4.4%, both figures unchanged from July.
For all workers, base pay rose 3.2% year-on-year and gross pay increased 4.7%, signalling that wage growth remains relatively stable even as hiring momentum fades.
The ADP figures arrive ahead of the Bureau of Labor Statistics’ nonfarm payrolls report, due Friday, which is expected to show an increase of 53,000 after a decline of 23,000 in July.
The unemployment rate is forecast to hold steady at 4.1%, a figure that will be closely watched by policymakers and investors assessing the health of the US economy.