US Private Payrolls See Slower Growth

Investing.com — US private payrolls rose by less than anticipated in August, signaling a gradual slowdown in the American labor market.

Private payrolls increased by 99,000 jobs in August, compared to a downwardly revised total of 111,000 in July, according to payrolls processor ADP. This represents the weakest month since January 2021.

Economists had predicted a figure of 144,000, adjusting from the original July estimate of 122,000.

“The job market’s downward drift brought us to slower-than-normal hiring after two years of outsized growth,” commented ADP Chief Economist Nela Richardson.

Additionally, data released Thursday showed that first-time unemployment benefits filings totaled 227,000 for the week ending August 31, a decrease of 5,000 from the revised level of 232,000 the previous week. Forecasts had expected to match the last week’s initial figure of 231,000.

While these results will be closely monitored by markets, the key data release of the week will be Friday’s nonfarm payrolls report from the Labor Department’s Bureau of Labor Statistics.

Economists anticipate that the US economy added 164,000 jobs last month, up from 114,000 the previous month. The disappointing July figures had triggered a broader market downturn as concerns over a US recession grew.

As these numbers emerge, the Federal Reserve is set for its next two-day policy meeting on Sept. 17-18. Many investors expect the central bank to reduce borrowing costs, currently at a 23-year high of 5.25% to 5.5%, by 25 basis points.

However, analysts warn that signs of a worsening jobs market could lead the Fed to consider larger rate cuts.