(Bloomberg) — U.S. companies added fewer jobs than expected in August, suggesting the labor market rebound remains gradual, with employment well below pre-pandemic levels.
Businesses’ payrolls increased by 428,000 after an upwardly revised 212,000 in July, according to ADP Research Institute data released Wednesday. The median projection in a Bloomberg survey of economists called for a 1 million gain for the latest month.
The latest data suggest companies continue to hire at a more moderate pace than immediately following the lifting of business lockdowns months ago. Amid widespread joblessness, it will take sustained demand growth to rebuild the labor market to what it was before the pandemic.
Yet, headwinds remain. The Paycheck Protection Program, which helped support employment in recent months, expired in August, and lawmakers have yet to pass an another comprehensive stimulus package. Meanwhile, companies continue to announce layoffs almost six months after the Covid-19 shutdowns.
Stock-index futures maintained gains along with the dollar, while the yield on the 10-year Treasury note was little changed after the report.
ADP’s figures have differed greatly from the government’s data over the past several months, leading in some cases to sizable revisions reflecting the process of benchmarking its number to the Bureau of Labor Statistics’ figure. For instance, ADP’s preliminary May estimate showed a 2.76 million decline in payrolls compared with the government’s initial print of a 3.09 million increase. ADP later revised its May figure to a 3.3 million gain.
“The August job postings demonstrate a slow recovery,” Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a statement. “Job gains are minimal, and businesses across all sizes and sectors have yet to come close to their pre-COVID-19 employment levels.”
Service-provider employment increased 389,000 in August, reflecting gains in leisure and hospitality and health care, according to ADP. Payrolls at goods producers rose 40,000 last month, largely reflecting a jump in employment at construction companies.
The figures come just before the government’s monthly jobs report on Friday, which is forecast to show private payrolls increased by nearly 1.3 million, the fourth-straight month of gains. The unemployment rate is expected to fall to 9.8%, the first single-digit print since March, but the degree of improvement may be impacted by an increase in participation as more out-of-work Americans look for jobs.
Payrolls at small, medium and large businesses all increased, yet the biggest advance occurred at firms employing at least 500 workers. Large businesses added 298,000 to payrolls and small companies took on 52,000.
ADP’s payroll data represent firms employing nearly 26 million workers in the U.S.
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