ADP Report: Private Employers Added Just 38,000 Jobs in August, Missing Forecasts

Since the Bureau of Labor Statistics reported a surprise loss of 23,000 jobs in July, the labor market has been under a microscope, and Wednesday's ADP National Employment Report didn't do much to ease the worry.

Private employers added just 38,000 jobs in August, according to ADP, below the Dow Jones consensus of 47,000 cited by CNBC and the 48,000 economists surveyed by Econoday and Reuters expected. It's also the weakest print since January.

July's number got revised up, from an initial 44,000 to 46,000, according to Reuters. That's a real improvement, but it doesn't change the trend line. Hiring is slowing.

Where the jobs are, and aren't

Three sectors did almost all the work. Education and health services led with 45,000 new jobs, according to ADP. Leisure and hospitality added 16,000. Construction added 12,000.

Everywhere else, the picture was ugly. Manufacturing lost 17,000 jobs. Professional and business services shed 16,000. Trade, transportation and utilities fell by 5,000, and natural resources and mining dropped another 5,000, per ADP's industry breakdown reported by TradingKey and Reuters.

Size matters too. Companies with 500 or more employees added 34,000 jobs, according to CNBC's Jeff Cox, while businesses with fewer than 50 workers grew by just 3,000. Small business, historically the engine of hiring, is barely moving.

Pay growth held steady. Base pay for all workers rose 3.2% year-over-year and gross pay, which includes tips, bonuses and commissions, was up 4.7%, according to ADP's own release. For workers who stayed in their jobs rather than switching, base pay rose 3.0% and gross pay 4.4%. Wages aren't collapsing. Job creation is.

What's driving the slowdown

Reuters, in a report carried by WHBL, quoted Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, who said the modest August gain should be viewed as "partly making up for acute weakness over the previous few months," adding that the spring hiring upturn "already has faded."

Reuters also reported that economists see two possible drags going forward: President Trump's tariffs, which have created hiring uncertainty over the past year, and his administration's immigration crackdown. Temporary Protected Status recently ended for hundreds of thousands of Haitians, cutting off their work authorization, and economists told Reuters that could weigh on August's payroll data. Reuters added there is no compelling evidence that AI adoption is behind the slowdown.

If work authorization is being pulled from legal categories of immigrants who were previously employed, some of the job losses showing up in sectors like trade and transportation could reflect fewer eligible workers rather than fewer available jobs. Reuters presents this as a risk factor for Friday's report, not a proven cause of August's ADP miss, and no source in this reporting quantifies how much of the 38,000 figure, if any, is attributable to TPS expirations specifically.

Markets bet on a rate cut

Traders read the weak ADP number as more ammunition for the Federal Reserve to cut rates. TradingKey reported that spot gold briefly jumped back near $4,340 an ounce and silver rose above $64 an ounce after the release, while Dow and S&P 500 futures strengthened and Nasdaq 100 futures briefly turned positive.

That's the market betting on looser Fed policy, not a market cheering a strong economy. A weak jobs number that sends stocks up is a signal traders think the Fed is more likely to cut rates, not evidence the labor market is fine.

The bigger picture, and Friday's real test

ADP has a mixed track record predicting the BLS's own private payrolls figure, a caveat Reuters flagged directly in its report. The real number comes Friday, September 4, when the BLS releases its August jobs report.

Forecasts for that report vary widely across sources. CNBC cited a Dow Jones consensus of 53,000 new jobs; Breitbart cited an estimate of 55,000; Reuters cited a survey estimate of 56,000. Separately, the Epoch Times reported on August 27, ahead of the ADP release, that Trading Economics' early estimate for August nonfarm payrolls was just 12,000, a fraction of the other forecasts. That's a notably wide spread of estimates for the same report, and it underscores how uncertain economists are about where hiring stands right now.

The unemployment rate is expected to hold at 4.1%, according to both CNBC and Reuters. Weekly jobless claims, meanwhile, fell to 203,000 for the week ending August 22, below the 208,000 markets expected, according to Department of Labor data reported by the Epoch Times. That's a sign layoffs remain rare even as new hiring cools. The "low fire, low hire" pattern several economists have used to describe 2026's labor market reflects this dynamic.

Friday's BLS report will also carry more weight than usual. It follows the preliminary annual payroll revision the BLS published August 28, covering the 12 months through March 2026, which will show whether prior job growth was overstated or understated using more complete unemployment insurance tax records, according to the Epoch Times.