Private payroll growth came in well below expectations for August, according to a report Wednesday from ADP, whose job tallies have differed widely from the government’s during the coronavirus pandemic.
Companies added 428,000 jobs during the month, well below the 1.17 million estimate from economists surveyed by Dow Jones though a leap above the lackluster 212,000 that ADP measured for July.
Big business dominated job creation, as firms with more than 500 employees added 298,000 workers. Medium-sized businesses were next with 79,000 while companies with fewer than 50 workers grew by 52,000.
Job creation skewed heavily to services, which added 389,000 compared with the 40,000 for goods producers. (The total doesn’t add up to 428,000 due to rounding.)
After lagging through the early part of the pandemic recovery, leisure and hospitality led with 129,000 new jobs while education and health services contributed 100,000 and professional and business services grew by 66,000. Construction also added 28,000 and manufacturing was up 9,000.
Markets reacted little to the report, with stock futures indicating a positive open on Wall Street and government bond yields edging higher.
“Job gains are minimal, and businesses across all sizes and sectors have yet to come close to their pre-COVID-19 employment levels,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.
ADP’s numbers have lagged the government’s count since the pandemic began in March. July’s total was revised up from the initial estimate of 167,000, but was still well below the Bureau of Labor Statistics nonfarm payroll count of 1.76 million. For June, ADP initially reported growth of 2.4 million, then revised it to nearly 4.5 million, and May’s total initially was a loss of 2.76 million that subsequently was revised all the way up to a gain of 3.34 million.
Mark Zandi, chief economist at Moody’s Analytics, which collaborates with ADP on the report, said after the July release that the revisions were simply to correlate with the BLS count.
Economists expect the government’s nonfarm payrolls report on Friday to show a gain of 1.32 million in August.