US economy adds 428,000 private payrolls in August, sharply missing expectations: ADP
Emily McCormickReporterYahoo FinanceSeptember 2, 2020https://platform.twitter.com/widgets/follow_button.html?screen_name=emily_mcck&show_screen_name=false&show_count=false Ad:https://cdn-ssl.vidible.tv/prod/player/vrm-plugin/0.0.89/xdomain-vpaid.html?id=0
The US economy regained fewer than expected private jobs in August, according to ADP’s closely watched monthly payrolls report.
Private payroll gains totaled 428,000 in August, coming in at less than half consensus economist estimates for 1 million, according to Bloomberg-compiled data. July’s private payroll gains were upwardly revised to 212,000, from the 167,000 previously reported.
The service-providing sector added back a net 389,000 payrolls in August, led by the leisure and hospitality industries with a gain of 129,000. Education and health services industries added 100,000 payrolls, accelerating gains from July. Information jobs were the only ones to have lost payrolls on net, with this industry seeing 1,000 net job losses.
The goods-producing sector added 40,000 payrolls during August. Construction industries added 28,000 jobs, after losing payrolls in July.
By business size, large companies with at least 500 employees added back the most jobs in August, or 298,000. Small- and medium-sized businesses gained 52,000 and 79,000, respectively.
Wednesday’s report marked the second consecutive month that ADP’s payrolls report sharply missed expectations, with payroll gains coming in the hundreds of thousands rather than at least 1 million.
“The recovery in jobs lost in this pandemic recession was always a weak one, especially in service-sector employment like retailing, hotels, and bars and restaurants, but now for a second month in a row it is looking like the jobs are not going to come back unless there is more stimulus from Washington to bolster economic demand and keep business activity and consumer spending growing,” Chris Rupkey, chief financial economist for MUFG Union Bank, said in an email.
The August private payrolls report captures the period during which other labor market indicators – including the Labor Department’s reports on weekly unemployment claims – pointed to sluggish improvement in the US job market. During the month, the coronavirus pandemic continued to weigh on reopening and rehiring plans, and a boosted benefit in federal unemployment insurance was phased out.
The report also comes two days before the Labor Department’s “official” August jobs report. In this, consensus economists expect to see non-farm payroll gains of 1.39 million, including private payroll gains of 1.288 million. The ADP employment print has historically been an imprecise indicator of the results of the Labor Department report due to differences in methodology. Most recently, the first print on July private payroll gains came in at 167,000 according to ADP, versus the more than 1.4 million private payroll gains the Labor Department reported thereafter.
This post is breaking. Check back for updates.