U.S. private payrolls rise moderately in August -ADP By Reuters

© Reuters. FILE PHOTO: A hiring sign is seen at the register of Burger Boy restaurant, as many restaurant businesses face staffing shortages in Louisville, Kentucky, U.S., June 7, 2021. REUTERS/Amira Karaoud/File Photo

By Lucia Mutikani

WASHINGTON(Reuters) -U.S. private employers hired far fewer workers than expected in August, likely because of a resurgence in new COVID-19 infections, but the labor market continues to steadily recover.

Private payrolls increased by 374,000 jobs last month after rising 326,000 in July, the ADP National Employment Report showed on Wednesday. Economists polled by Reuters had forecast private payrolls would increase by 613,000 jobs.

The ADP report is jointly developed with Moody’s (NYSE:) Analytics and was published ahead of the Labor Department’s more comprehensive and closely watched employment report for August on Friday. But it has a dismal record predicting the private payrolls count in the department’s Bureau of Labor Statistics (BLS) employment report because of methodology differences.

“ADP is far from consistent in predicting changes in the BLS payrolls data,” said Rubeela Farooqi, chief U.S. economist at High Frequency economics in White Plains, New York. “Overall, job growth has strengthened in recent months, even as companies continue to report labor supply shortages.”

ADP’s private payrolls print for July far undershot the 703,000 private jobs reported by the BLS. According to the ADP report, leisure and hospitality employment increased by 201,000 jobs in August. Construction payrolls rose by 30,000 jobs, while manufacturing added 6,000 positions.

U.S. stock index futures extended gains after the report. The dollar slipped against a basket of currencies. U.S. Treasury prices were higher.


Economists expect hiring remained strong in August, though persistent worker shortages and a resurgence in COVID-19 infections, which are being driven by the Delta variant of the coronavirus, could have slowed momentum.

Labor market indicators were mixed in August. Data from Homebase, a payroll scheduling and tracking company, showed its employees working index falling in August from July.

But the Paychex/IHS Markit employment watch released on Tuesday showed its small business jobs index rose in August to the highest level since January 2018. The Conference Board’s labor market differential – derived from data on consumers’ views on whether jobs are plentiful or hard to get – slipped in August, but it was not too far from July’s 21-year high.

According to a Reuters survey of economists, private payrolls likely increased by 700,000 jobs in August after rising 703,000 in July. With government employment expected to have increased by about 50,000, that would lead to overall payrolls advancing by 750,000 jobs. The economy created 943,000 in July.

“The labor market recovery continues, although the Delta variant is a downside risk to the outlook,” said Gus Faucher, chief economist at PNC Financial (NYSE:) in Pittsburgh, Pennsylvania. “Demand for labor is strong, the key constraint on near-term job growth will be labor supply.”

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