Private-sector employment in the United States increased by 38,000 jobs in August, the smallest gain since January, according to data released on Wednesday by payroll processor ADP. The figure fell short of the 48,000 increase forecast by economists polled by Reuters and followed a revised rise of 46,000 in July.
Job losses were recorded in manufacturing, professional and business services, and the information sector. In contrast, education and health services, construction, leisure and hospitality, and trade saw gains. The ADP report, which does not include government employment, comes ahead of the U.S. Labor Department’s nonfarm payrolls report due on Friday.
Economists expect the official jobs report to show a net increase of 56,000 positions in August, following an unexpected decline of 23,000 in July. The Federal Reserve monitors labor market data closely as part of its dual mandate to achieve maximum employment and price stability. The central bank left its benchmark interest rate unchanged in a range of 3.50% to 3.75% at its most recent meeting.
Federal Reserve Governor Kevin Warsh recently signaled potential action if inflation remains elevated. In a similar vein, Federal Reserve Vice Chair for Supervision Michael Barr noted that inflation has exceeded the central bank’s 2.0% target for more than five years. Barr stated that if inflation does not show sufficient signs of easing ahead of the mid-September policy decision, the Fed should act decisively to raise interest rates.
