U.S. companies chose to temper their plans to re-hire displaced workers in August, with private payrolls increasing by only a fraction of what economists had been expecting, ADP reported Wednesday.
Private payrolls grew by 428,000 last month, according to ADP, well below the 975,000 expected from economists surveyed by FactSet, though still better than July's tepid 167,000 positions created.
The numbers continue to illustrate how businesses are struggling to reopen and re-hire amid the now six-month-long pandemic that has thrown a wrench in the U.S. economy and also has forced businesses to re-assess if and how they can operate.
“The August job postings demonstrate a slow recovery,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Job gains are minimal, and businesses across all sizes and sectors have yet to come close to their pre-Covid-19 employment levels.”
Indeed, while a rearview mirror, the numbers are a grim prelude to August’s nonfarm payroll report, to be released by the Labor Department on Friday. Analysts polled by FactSet are expecting some 1.5 million jobs to have been created last month following June's 1.8 million gain.
The unemployment rate is expected to dip to 9.8% from 10.2% in July.
By category, businesses with between 50 and 499 employees reported gains of 79,000 for the month, while big business added 298,000 jobs, while firms with fewer than 50 workers added 52,000, ADP said.
The bulk of the hires were in service-related industries, with 389,000 new positions being added by U.S. companies. Goods-producing sectors created 40,000 new jobs, ADP said. All categories showed gains but for Information, which posted a 1,000 drop.
Leisure and hospitality showed the biggest gains, with 129,000 positioned added in August, followed by education and health at 100,000 and professional and business at 66,000. On the heavy-lifting side, the construction industry added 28,000 new jobs, while manufacturing created 28,000 positions.