By Xavier Fontdegloria


U.S. private sector employers added jobs in August, albeit less than in the previous month, in a sign the labor market cooled amid slowing economic growth and increasing recession fears.

Employment in the nonfarm private sector rose by 132,000 in August from 270,000 in July, data from the ADP National Employment Report showed Wednesday.

Economists polled by The Wall Street Journal expected the ADP reading to come in at an increase of 300,000.

The ADP estimate is based on aggregated payroll data of more than 25 million U.S. workers and is independent from the Labor Department official data. The report's methodology has been upgraded and developed with the Stanford Digital Economy Lab, and includes new data on wages. Before the change in methodology, the ADP series could diverge considerably from the Labor Department's data.

"Our data suggests a shift toward a more conservative pace of hiring, possibly as companies try to decipher the economy's conflicting signals," said Nela Richardson, chief economist at ADP. "We could be at an inflection point, from super-charged job gains to something more normal," she said.

Gains in employment focused in large and medium-sized businesses, which added 54,000 and 53,000 jobs, respectively. Small businesses also created jobs, but less so than their bigger peers with 25,000 new payrolls.

By sector, services providers added 110,000 jobs, and 96,000 of them were created in the leisure and hospitality industry. Other categories such as financial activities, education and health services, and professional and business services shed jobs over the month, the data showed.

The goods-producing industry created 23,000 jobs, of which 21,000 were in construction and 2,000 in natural resources and mining. Employment in the manufacturing sector remained unchanged, according to the data.

The report included new pay data, which is based on the salaries of almost 10 million individual employees over a 12-month period.

Annual pay was up 7.6% in August, in line with monthly readings since spring 2022, ADP said. "While the pace of pay increases is elevated, its growth has flattened," the report said.

The U.S. Department of Labor is expected to release its August employment report on Friday. Economists polled by The Wall Street Journal are expecting it to show nonfarm payrolls up by 318,000, while the unemployment is seen unchanged at 3.5%.


Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com


(END) Dow Jones Newswires

08-31-22 0852ET