US private sector adds less jobs than forecast in August; jobless claims rise
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The news: Hiring at US companies increased less than expected in August, at roughly half the pace of the month prior, as evidence builds that the labour market is cooling.
The numbers: Private-sector payrolls increased by 54,000 according to ADP Research data released Thursday. Economists had expected the ADP report to show private employers added around 75,000 jobs in August, according to a Wall Street Journal poll. That is down from 104,000 in July.
Leisure and hospitality led job growth, followed by construction and business services. Trade, education and health, and manufacturing shed jobs.
Annual pay was up 4.4% year-on-year.
Benchmark Treasury yields declined to their lowest levels in months on Thursday’s labour-market data. While yields across several maturities by fewer than four basis points, the five-year note’s yield reached the lowest level since the early-April rally spurred by the US administration’s tariff plans, and the 10-year note’s fell below 4.17%.
The context: Last week Federal Reserve governor Christopher Waller said that preliminary estimates from ADP have signalled a deterioration across the US job market, which is feeding expectations of an interest rate cut when the Fed meets later this month.
Wednesday’s JOLTS report also indicated that US job openings slipped unexpectedly in July.
Separately, data released Thursday by the US Labor Department showed that applications for US unemployment benefits rose to the highest level since June last week. Initial claims increased by 8,000 to 237,000 in the week ending 30 August, while continued claims, a proxy gauge for the number of people receiving benefits was little changes at 1.94 million during the week.
The sources: ADP National Employment Report, US Labor Department, WSJ, Bloomberg
