- Lead. Private employers in the United States added just 38,000 jobs in August, according to ADP data released September 2—the slowest monthly pace since January and well below the consensus forecast of 47,000.
- Fact. Manufacturing shed 17,000 positions and professional and business services fell by 16,000; the only meaningful offset was education and health services, which added 45,000 positions.
- Stake. The reading arrives two days before the Bureau of Labor Statistics’ official August payrolls report and eleven days before the Federal Reserve’s September 16 rate decision, where markets are already pricing a hike to 3.8%.
The ADP National Employment Report, released on September 2, captured a labor market operating at its most sluggish pace in eight months. Private businesses in the United States added 38,000 jobs in August, below an upwardly revised 46,000 in July and beneath the 47,000 that economists had forecast. The data reported by CNBC pointed to a labor market in which hiring has become increasingly concentrated among large firms and a handful of sectors.
Where Jobs Were Lost and Where They Weren’t
The August breakdown showed a stark divergence across industries. Education and health services added 45,000 positions, leisure and hospitality added 16,000, and construction contributed 12,000. Against those gains, manufacturing shed 17,000 workers—a signal consistent with the softening factory activity data reported earlier in the week. Professional and business services fell by 16,000, and natural resources, mining, trade, transportation and utilities each declined by around 5,000.
The concentration of gains in services and losses in goods-producing sectors mirrors a pattern that has persisted for much of 2026, even as the broader economy has remained resilient by headline measures.
Small Businesses on the Sideline
Perhaps the most telling detail in the ADP data was the role of firm size. Companies with 500 or more employees on payroll accounted for 34,000 of the 38,000 net additions. Businesses with fewer than 50 workers added just 3,000—a figure that suggests small and medium enterprises are holding back from new hires, possibly in response to elevated borrowing costs and uncertainty about the interest-rate outlook.
The total hires rate tracked by the Bureau of Labor Statistics separately slipped to 5.1 million in July, while the quits rate—a measure of worker confidence in job-switching—fell to 1.9%, its lowest level in several years. Those measures point to a cooling in labor-market dynamism that the ADP reading reinforces.
What It Means for September 4 and September 16
The official August payrolls report from the BLS is due September 4 at 8:30 am Eastern. Economists expect the economy to have added 58,000 total jobs, with the unemployment rate holding at 4.1%. July’s payrolls had already surprised to the downside, falling 23,000 in the first outright monthly decline in months. A second consecutive soft reading could accelerate market debate about whether the Federal Reserve’s expected September 16 hike is appropriate given the simultaneous inflation and growth pressures facing the economy.
Federal Reserve Chair Kevin Warsh, speaking at Jackson Hole in late August, warned that inflation remains too high for the central bank to stand down. But a run of weak employment prints between now and the FOMC meeting could complicate that message, leaving policymakers to navigate a narrower path between price stability and labor-market support.