ADP National Employment Report: Private Sector Employment Increased by 99,000 Jobs in August; Annual Pay was Up 4.8%

Rhea-AI Summary

The August ADP® National Employment Report™ reveals that private sector employment increased by 99,000 jobs in August 2024, while annual pay rose 4.8% year-over-year. This marks the fifth consecutive month of slowing job creation among private employers, indicating a cooling labor market. Key highlights include:

- Goods-producing sectors added 27,000 jobs
- Service-providing sectors added 72,000 jobs
- The South region led with 55,000 new jobs
- Medium establishments (50-499 employees) contributed the most with 68,000 jobs
- Pay gains remained stable at 4.8% for job-stayers and 7.3% for job-changers

The report, based on actual payroll data from over 25 million U.S. employees, provides a high-frequency, near real-time measure of U.S. employment and pay insights.

Positive

• Private sector employment increased by 99,000 jobs in August
• Annual pay rose 4.8% year-over-year
• Medium establishments (50-499 employees) added 68,000 jobs
• The South region led job growth with 55,000 new jobs
• Pay gains for job-changers remained strong at 7.3%

Negative

• Job creation among private employers slowed for the fifth straight month
• Small establishments (1-49 employees) lost 9,000 jobs
• Manufacturing sector lost 8,000 jobs
• Professional/business services sector lost 16,000 jobs
• July's job addition was revised down from 122,000 to 111,000

Labor Market Analyst

The August ADP National Employment Report reveals a continued cooling of the U.S. labor market. With private sector employment increasing by 99,000 jobs, we're seeing a fifth consecutive month of slowing job creation. This trend suggests a normalization after the post-pandemic surge.

The service-providing sector led job gains with 72,000 new positions, while goods-producing industries added 27,000 jobs. Notably, manufacturing saw a decline of 8,000 jobs, potentially indicating challenges in this sector.

Annual pay growth remained stable at 4.8% for job-stayers and 7.3% for job-changers. This wage stability amid slowing job growth could indicate a balancing act between employers' cost management and the need to retain talent in a still-tight labor market.

Economic Forecaster

The 99,000 job increase falls below the pre-pandemic average, signaling a potential shift towards more sustainable growth. This moderation, coupled with stable wage growth, may ease inflationary pressures, potentially influencing the Federal Reserve's monetary policy decisions.

The regional disparity in job creation is noteworthy, with the South adding 55,000 jobs, while the Midwest only added 7,000. This uneven growth could have implications for regional economic development and migration patterns.

The continued strength in medium and large establishments, adding 68,000 and 42,000 jobs respectively, contrasts with the loss of 9,000 jobs in small establishments. This trend may reflect the ongoing challenges faced by small businesses in the current economic environment.

Financial Analyst

The slower job growth and stable wage increases present a mixed picture for investors. While it may alleviate concerns about aggressive interest rate hikes, it also signals a cooling economy, which could impact corporate earnings.

The education/health services sector showed resilience, adding 29,000 jobs, which could be attractive for investors looking for defensive plays. Conversely, the decline in manufacturing and professional/business services jobs might warrant caution for related industries.

The divergence between job-stayer (4.8%) and job-changer (7.3%) wage growth remains significant. This could lead to increased labor mobility and potentially higher costs for companies trying to retain top talent, affecting profit margins in competitive sectors.

ROSELAND, N.J., Sept. 5, 2024 /PRNewswire/ -- Private sector employment increased by 99,000 jobs in August and annual pay was up 4.8 percent year-over-year, according to the August ADP^® National Employment Report™ produced by ADP Research in collaboration with the Stanford Digital Economy Lab ("Stanford Lab"). The ADP National Employment Report is an independent measure and high-frequency view of the private-sector labor market based on actual, anonymized payroll data of more than 25 million U.S. employees.

The jobs report and pay insights use ADP's fine-grained anonymized and aggregated payroll data to provide a representative picture of the private-sector labor market. The report details the current month's total private employment change, and weekly job data from the previous month. Because the underlying ADP payroll databases are continuously updated, the report provides a high-frequency, near real-time measure of U.S. employment. This measure reflects the number of employees on ADP client payrolls (Payroll Employment) to provide a richer understanding of the labor market. ADP's pay measure uniquely captures the earnings of a cohort of almost 10 million employees over a 12-month period.

"The job market's downward drift brought us to slower-than-normal hiring after two years of outsized growth," said Nela Richardson, chief economist, ADP. "The next indicator to watch is wage growth, which is stabilizing after a dramatic post-pandemic slowdown."

August 2024 Report Highlights*

View the ADP National Employment Report and interactive charts at www.adpemploymentreport.com.

JOBS REPORT

Private employers added 99,000 jobs in August
The labor market continued to cool in August. Job creation among private employers slowed for the fifth straight month and wage growth was stable.

Change in U.S. Private Employment:     99,000

Change by Industry Sector

- Goods-producing:     27,000

• Natural resources/mining     8,000
• Construction     27,000
• Manufacturing     -8,000

- Service-providing:     72,000

• Trade/transportation/utilities     14,000
• Information     -4,000
• Financial activities     18,000
• Professional/business services     -16,000
• Education/health services     29,000
• Leisure/hospitality     11,000
• Other services     20,000

Change by U.S. Regions

- Northeast:     24,000

• New England     -6,000
• Middle Atlantic     30,000

- Midwest:     7,000

• East North Central     0
• West North Central     7,000

- South:     55,000

• South Atlantic     4,000
• East South Central     3,000
• West South Central     48,000

- West:     20,000

• Mountain     8,000
• Pacific     12,000

Change by Establishment Size

- Small establishments:     -9,000

• 1-19 employees     3,000
• 20-49 employees     -12,000

- Medium establishments:     68,000

• 50-249 employees     32,000
• 250-499 employees     36,000

- Large establishments:     42,000

• 500+ employees     42,000

PAY INSIGHTS

Pay gains were unchanged in August
Year-over-year pay gains were flat in August, remaining at 4.8 percent for job-stayers and 7.3 percent for job-changers.

Median Change in Annual Pay (ADP matched person sample)

- Job-Stayers     4.8%

- Job-Changers     7.3%

Median Change in Annual Pay for Job-Stayers by Industry Sector

- Goods-producing:                                                       

• Natural resources/mining     3.9%
• Construction     5.2%
• Manufacturing     4.7%

- Service-providing:                                               

• Trade/transportation/utilities     4.5%
• Information     4.5%
• Financial activities     5.0%
• Professional/business services     4.7%
• Education/health services     5.1%
• Leisure/hospitality     4.9%
• Other services     4.9%

Median Change in Annual Pay for Job-Stayers by Firm Size

- Small firms:                                                                

• 1-19 employees     4.0%
• 20-49 employees     4.7%

- Medium firms:                                                             

• 50-249 employees     5.0%
• 250-499 employees     4.9%

- Large firms:                                                                

• 500+ employees     4.8%

To see Pay Insights by U.S. State, Gender, and Age for Job-Stayers, visit here:

* Sum of components may not equal total due to rounding.

ADP conducted a rebenchmarking of its employment data in August based on full-year 2023 results from the Quarterly Census of Employment and Wages (QCEW). This resulted in a decline of 9,000 jobs in the August ADP National Employment Report. ADP's full-year benchmarking will take place in February 2025 with the publication of the January 2025 report.

The July total of jobs added was revised from 122,000 to 111,000. The historical data file and weekly data for the previous month are available at https://adpemploymentreport.com/.

To subscribe to monthly email alerts or obtain additional information about the ADP National Employment Report, including employment and pay data, interactive charts, methodology, and a calendar of release dates, please visit https://adpemploymentreport.com/.    

The September 2024 ADP National Employment Report will be released at 8:15 a.m. ET on October 2, 2024.

About the ADP® National Employment Report™
The ADP National Employment Report is an independent measure of the change in U.S. private employment and pay derived from actual, anonymized payroll data of client companies served by ADP, a leading provider of human capital management solutions. The report is produced by ADP Research in collaboration with the Stanford Digital Economy Lab.

The ADP National Employment Report is broadly distributed to the public each month, free of charge, as part of the company's commitment to offering deeper insights of the U.S. labor market and providing businesses and governments with a source of credible and valuable information.

About the ADP Research
The mission of ADP Research is to make the future of work more productive through data-driven discovery. Companies, workers, and policymakers rely on our finely tuned data and unique perspective to make informed decisions that impact workplaces around the world.

About ADP (NASDAQ – ADP)
Designing better ways to work through cutting-edge products, premium services and exceptional experiences that enable people to reach their full potential.  HR, Talent, Time Management, Benefits and Payroll. Informed by data and designed for people.   Learn more at ADP.com

ADP, the ADP logo, and Always Designing for People, ADP National Employment Report, ADP Research Institute and ADP Research are trademarks of ADP, Inc. All other marks are the property of their respective owners.

Copyright © 2024 ADP, Inc. All rights reserved.

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SOURCE ADP, Inc.

FAQ

How many private sector jobs were added in August 2024 according to the ADP National Employment Report?

According to the ADP National Employment Report, private sector employment increased by 99,000 jobs in August 2024.

What was the annual pay increase reported by ADP for August 2024?

The ADP report showed that annual pay was up 4.8% year-over-year in August 2024.

Which industry sectors showed job losses in the August 2024 ADP report?

The August 2024 ADP report showed job losses in manufacturing (-8,000), information (-4,000), and professional/business services (-16,000) sectors.

How did ADP's employment data change after rebenchmarking in August 2024?

ADP's rebenchmarking of employment data in August 2024 resulted in a decline of 9,000 jobs in the ADP National Employment Report.

What was the pay increase for job-stayers versus job-changers according to ADP's August 2024 report?

According to ADP's August 2024 report, job-stayers saw a 4.8% increase in annual pay, while job-changers experienced a 7.3% increase.