ADP Employment: Modest Gains

Bottom Line:   ADP reported slower than expected job growth for the second month in a row in August. Leisure and hospitality hiring increased slightly, despite the delta variant, but remained below its three- and six-month averages.  Goods-producing job gains were stronger in August relative to July, led by a bounce in construction jobs.  Looking through the volatility, though, the goods-producing and service-providing sectors have seen slowing hiring trends over the last three- and six months.  We should remember that tremendous volatility in all economic data remains, and data collection is difficult.  Last month saw a similar miss in the ADP report relative to expectations, but the national payroll data came in stronger.  Still, these ADP data are usually reliable over time and point to slower job gains in most sectors, suggesting downside risk to Friday's consensus payroll forecasts of 748k jobs.ADP National Employment ROSE by 374k in August, compared with the consensus estimate for a gain of 625k.  Meanwhile, the revisions to the prior 3 months added an additional 57k to the previous estimate. Over the past 12 months, private payrolls have increased by an average of 442k per month, lifting employment to 4.5% ABOVE its year-ago level.
 
Jobs in Goods-Producing Industries ROSE by 45k jobs as Manufacturing gained 6k workers. Moreover, Construction gained 30k jobs.

Service-Producing Industries ROSE by 329k jobs with Professional/Business Services hiring 19k workers,Trade/Transport/Utilities added 18k, and Financial Activities increased by 13k workers.Small Firms hired 87k workers, Medium-Sized Firms grew by 150k employees while Large Firms added 138k positions.