A Panda Express restaurant displays a “Now Hiring” sign on June 1, 2021 in Tampa, Florida.
Octavio Jones | Reuters
U.S. businesses created fewer jobs in August than expected in August, according to a report released on Wednesday by payroll services company ADP, as the resurgence of Covid slashed hiring.
Personal wages for the month rose only 374,000, well below the Dow Jones estimate of 600,000, although up from July’s 326,000, which was revised slightly down by compared to the first 330,000 digits.
Most of the new jobs came from leisure and hospitality, which added 201,000 jobs, a somewhat encouraging sign that the industry in the grip of labor shortages continues to improve.
Combined education and health services added 59,000 this month as hospitals in parts of the country swelled with cases of the virus and schools began to reopen.
“The delta version of COVID-19 has had an impact on the labor market recovery,” said Mark Zandi, chief economist at Moody’s Analytics, who worked with ADP on the report. “Job growth remains strong, but far from the pace of recent months. Job growth is inextricably linked with the trajectory of the pandemic. “
The apparent lethargy comes at a critical time.
After a strong recovery from the shortest but strongest recession in U.S. history, economic data has been disappointing lately, perhaps reflecting the downsides of the COVID delta boom this summer. The United States has reported an average of about 150,000 new cases per day since the July and August eruption.
Markets await Friday’s nonfarm wage report, which is expected to create 720,000 new jobs and the unemployment rate to drop to 5.2%, according to Dow Jones estimates.
Wall Street largely ignored the report, with stock market futures still showing a higher open.
difference between the number of jobs
ADP figures may indicate a slack report from the Department of Labor, although the company’s number was an unreliable indicator in 2021.
ADP reported an average increase of 495,000 per month through July; The labor report showed an average increase of 617,000 during this period. Both ratios have also changed dramatically, with an official tally of 943,000 compared to ADP’s 326,000 in July.
According to the ADP, the weakest job growth in August was in small businesses, adding just 86,000 jobs. Companies with 50 to 499 employees resulted in 149,000 employees, while large companies contributed 138,000.
Elsewhere at the sectoral level, the total number of services was 329,000, with professional and business services increasing by 19,000 and trade, transport and utilities by 18,000.
Of the 45,000 goods-producing jobs, 30,000 were in construction, 9,000 in natural resources and mining, and 6,000 in manufacturing.
Federal Reserve officials are closely monitoring the employment figures.
Recent statements from the central bank indicate that it will slow bond movements every month as long as job growth continues. Officials have been largely optimistic about the employment situation, although they note that there are still around 6 million fewer workers than before the pandemic.
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