“We could be at an inflection point, from super-charged job gains to something more normal,” said ADP’s chief economist Nela Richardson.
The U.S. economy added fewer-than-expected new private sector jobs in August, payroll processing group ADP said Wednesday, suggesting a slowdown in hiring in the world’s biggest economy heading into the back-half of the year.
ADP said in its National Employment Report that private sector jobs grew by 132,000 last month, well shy of Street forecasts of a 288,000 gain, using a new methodology that ADP says will provide a “more robust, high-frequency view of the labor market and trajectory of economic growth.”
ADP declined to publish figures for June and July as it altered its data to better reflect changes linked to the Labor Department’s monthly non-farm payroll report.
“Our data suggests a recent shift toward a more conservative pace of hiring, possibly as companies try to decipher the economy’s conflicting signals,” said ADP’s chief economist Nela Richardson. “We could be at an inflection point, from super-charged job gains to something more normal.”
The ADP reading forms a key part of this week’s data releases centered around the jobs markets, particularly following yesterday’s July JOLTs update which showed a big jump in overall vacancies, which were pegged at 11.239 million, adding to concerns that faster-than-expected wage increases will be needed to tempt Americans back into employment.
The ADP release will be followed by weekly jobless claims on Thursday and Friday’s August non-farm payroll report, which is expected to show 285,000 new hires, down from the red-hot tally of 528,000 in July.
U.S. equity futures were little-changed on the back of the release, with contracts tied to the Dow Jones Industrial Average indicating a 65 point bump and those linked to the S&P 500 priced for a 12 point gain.
Benchmark 10-year Treasury notes yields were last seen 1 basis point lower at 3.112%, while the dollar index was marked 0.21% higher at 108.991 against a basket of its global currency peers.