Topline<\/p>\n
Employment in the U.S. private sector declined again in August, according to a report released Thursday by private payroll processing firm ADP, the latest signal of job market growth cooling as President Donald Trump awaits unemployment data amid a push for interest rate cuts. <\/p>\n
The year started with \u201cstrong job growth,\u201d though momentum has been \u201cwhipsawed by uncertainty,\u201d economists said in a report.<\/p>\n
Getty ImagesKey Facts<\/p>\n
Private sector employment increased by 54,000 jobs in August, ADP reported<\/a>, falling well below July\u2019s 106,000 added jobs and consensus economist estimates of 85,000, according to FactSet.<\/p>\n Jobs related to trade, transportation and utilities lost 17,000 positions month-to-month, while education and health services recorded a decline of 12,000 jobs, though a surge was reported in the leisure and hospitality industry, which tacked on 50,000 jobs in August, according to ADP.<\/p>\n The Labor Department reported<\/a> Thursday that jobless claims ticked up to 237,000 last week, the highest level since June while up 8,000 from the prior week and higher than Wall Street\u2019s forecast of 231,000, after the Bureau of Labor Statistics reported<\/a> on Wednesday job openings for July that matched one of the lowest levels since the pandemic. <\/p>\n Crucial Quote<\/p>\n \u201cThe year started with strong job growth, but that momentum has been whipsawed by uncertainty,\u201d Nela Richardson, ADP\u2019s chief economist, said in a statement. Richardson said a \u201cvariety of things\u201d could explain a private hiring slowdown, including \u201clabor shortages, skittish consumers and AI disruptions.\u201d<\/p>\n What To Watch For<\/p>\n The BLS will release data for nonfarm payrolls and unemployment on Friday, the first for the agency since Trump ousted commissioner Erika McEntarfer after claiming she manipulated data during the 2024 election. Economists expect unemployment to remain at 4.2% in August while 80,000 jobs are expected to have been added, according to FactSet. <\/p>\n Big Number<\/p>\n 97.4%. Those are the odds of at least a quarter-point reduction to interest rates, which have sat between 4.25% and 4.5% since December, according<\/a> to CME\u2019s FedWatch. <\/p>\n Key Background<\/p>\n The Federal Reserve has pointed to a dual mandate of full employment and stabilized inflation before considering interest rate cuts, and a cooled labor market has fueled speculation the central bank will soon opt for looser monetary policy. Fed chair Jerome Powell has said the central bank would await incoming jobs and inflation data before looking at rate cuts, despite pressure from Trump and other Republican officials in recent months. Jeffrey Roach, LPL Financial\u2019s chief economist, wrote last month he believed the Fed would cut rates as Powell and other monetary policymakers focus on the \u201cweakening labor market.\u201d<\/p>\n