ADP said private companies brought on 38,000 workers in August, short of the 47,000 economists were looking for and down from the now-revised 46,000 in July. It was the weakest monthly gain since January, a sign of a broader cooling in the job market even as overall hiring remained positive.
Gains were packed into just a handful of industries. The combined education and health services category added 45,000 jobs, with health care leading the charge. Leisure and hospitality tacked on 16,000 and construction rose by 12,000.
On the flip side, manufacturing shed 17,000 positions and professional and business services fell by 16,000. Natural resources and mining slipped by 5,000, and trade, transportation and utilities also declined by 5,000.
Almost all of the hiring showed up at large employers. Companies employing 500 or more people added 34,000 jobs, and small firms with under 50 workers lifted headcount by 3,000. Pay growth held steady.
In August, ADP began splitting out base pay from gross pay, defining gross pay to include items such as gratuities, commission payouts, bonus payments, and additional forms of compensation. For people staying in their current roles, base pay rose 3% year over year and gross pay climbed 4.4%, both unchanged from July. Across all workers, base pay increased 3.2% and gross pay rose 4.7%.
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ADP's snapshot lands just before the government's nonfarm payrolls report. The Bureau of Labor Statistics is slated to release its numbers on Friday, and forecasters expect a 53,000 increase after July's 23,000 decline. The unemployment rate is projected to hold at 4.1%.
A job market that is still adding workers but leaning heavily on a few sectors can keep paychecks coming while cooling overall momentum. That mix tends to ease pressure on borrowing costs without slamming demand. If you rely on healthcare, hospitality or construction, the hiring backdrop remains supportive.
If you're tied to manufacturing or professional services, the slowdown is more noticeable. Keep an eye on Friday's report - it will shape how confident consumers and businesses feel heading into fall.