Haver Analytics
Haver Analytics
| Aug 30 2023

ADP Employment Advance Pulls Back Sharply in August

  • Disappointing employment gain is nearly half of July’s.
  • Service-sector hiring slowdown is led by leisure & hospitality.
  • Pay increases decelerate broadly.

Nonfarm private sector payrolls increased 177,000 (2.3% y/y) during August after rising 312,000 in July, revised from 324,000. A 193,000 increase was expected in the Action Economics Forecast Survey. The gain was the weakest since March and pulled three-month growth down moderately to 315,000 per month from 345,000.

Small businesses hiring (1-49 employees) rose 18,000 during August (1.6% y/y) following four increases which averaged 192,000 per month. Employment at firms with 50-499 employees rose 79,000 (3.8% y/y), nearly half the increases averaged in each of the prior four months. Employment at large-sized firms rose 83,000 (0.8% y/y) in August after falling in each of the prior three months.

By industry group, goods-producing employment rose 23,000 (2.8% y/y) after a 43,000 July rise and a 124,000 June increase. Hiring in the natural resource & mining sector edged 5,000 higher (21.4% y/y) following six straight months of strong gain. Construction employment improved 6,000 (4.9% y/y), after a lessened 27,000 July gain. Factory sector jobs rose 12,000 (-0.9% y/y) following five straight monthly declines.

Service-producing jobs rose 154,000 last month (2.2% y/y) after a 269,000 July rise and a 331,000 June surge. The number of leisure & hospitality jobs rose 30,000 (9.0% y/y) after triple-digit gains in five of the prior six months. Education & health services employment rose 52,000 (2.1% y/y) after improving 12,000 in July. Trade, transportation & utilities payrolls rose 45,000 (1.4% y/y) in August, after increasing 26,000 in the prior month. Professional & business services employment rose 15,000 (0.2% y/y) following a 1,000 rise. Information sector employment increased 5,000 (-1.2% y/y) after rising 26,000 in July. Financial activities employment held steady (-1.7% y/y) after declining in each month since December.

Growth in median annual pay for "job stayers" weakened to 5.9% y/y in August from 6.2% y/y in July and remained below a September 2022 high of 7.8% y/y. The earnings slowdown continued to be led by the leisure & hospitality sector, where a 6.9% y/y pay gain compared to 16.9% y/y growth in March 2022. Education & health services pay rose a lessened 6.5% y/y, down from 7.3% y/y high last October. Financial sector earnings rose 6.2% y/y, below a 7.8% y/y high in November while information sector pay rose 5.4% y/y, below the 8.0% y/y peak in June 2022. Factory sector earnings rose 5.5% y/y versus a high of 7.8% y/y in September 2022. Pay increases for “job changers” decelerated sharply, averaging 9.5% y/y, below the 16.4% y/y peak in June 2022.

By Census region, employment in the Northeast improved 59,000 (6.7% y/y) following a 244,000 July gain. The number of jobs in the South rose 119,000 (-0.5% y/y) after a 115,000 decline. Employment in the West increased 13,000 (2.6% y/y) in August following a 34,000 July increase. To the downside, jobs in the Midwest fell 15,000 (+3.0% y/y) after rising 151,000 in July.

The ADP National Employment Report and Pay Insights data can be found in Haver's USECON database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's AS1REPNA database.

  • Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio.   Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984.   He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C.   In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists.   Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.

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