Little farmers are “upset”! ADP employment in the US increased by only 38,000 in August, hitting a new low during the year

The Zhitong Finance App learned that according to data released by the ADP Research Institute on Wednesday, the number of people employed in the US private sector known as “small non-farmers” increased moderately in August. Private employment increased by 38,000 last month, and the July data was revised to 46,000. Economists in market research had predicted that private employment would increase by 48,000 in August after the 44,000 increase initially reported in July. The data shows that employers are still recruiting, but at a slower rate than in spring. The number of new jobs added in August was the smallest increase since the beginning of the year.

The ADP report was jointly prepared by ADP and the Stanford Digital Economy Lab and released ahead of the Bureau of Labor Statistics (BLS)'s more comprehensive and much-publicized non-farm payrolls report for August (to be released on Friday). ADP data has historically had limited reference value for BLS private employment estimates.

By industry, education and medical services led the way, followed by the leisure hotel industry and construction industry, and employment in the manufacturing industry shrank. According to ADP data, most of the new jobs came from large companies with 500 or more employees.

From a broader perspective, employment growth has shown an uneven trend this year, yet another government data shows that the unemployment rate is still at a historically low level. This situation has reassured some Federal Reserve officials — the labor market is more or less balanced, so more attention can be focused on inflation.

Federal Reserve Chairman Kevin Walsh acknowledged last week that there are some “areas of concern,” but overall said the labor market meets the requirements for full employment.

“When the labor supply hardly grows, the average number of new jobs per month naturally remains low,” Walsh said in a speech at the Federal Reserve's annual seminar in Wyoming. “But overall, people who want to work can almost always find or keep a job.”

Multiple factors, such as tightening immigration policies, declining birth rates, and an aging population, have combined to limit the growth rate of America's labor force.

Salary growth

At the same time, the data showed that the total remuneration of job-hitters increased by 7.3% year on year, and the growth rate was slower than the previous month. The total remuneration of those who remain in office increased 4.4% year over year, the same as the previous month. ADP also calculated basic salary (excluding bonuses, commissions, and tips) data, which is similar to total compensation.

Currently, ADP has provided employee salary data covering 56 metropolitan areas across the United States, which can be broken down by demographic characteristics, industry, and enterprise size.

The US Department of Labor will release a more comprehensive August employment report (covering public sector recruitment) on Friday. The market expects the total number of non-farm payrolls to increase by 55,000 in August, rebounding from the weak performance of an unexpected drop of 23,000 in July.

According to data released by the Bureau of Labor Statistics on Tuesday, each unemployed person in the US corresponded to 1.05 job vacancies in July, which is basically the same as in June, indicating that the labor market situation remains stable.