U.S. August ADP Employment - Consistent with low hiring and low firing
August’s ADP estimate of private sector employment of 38k is on the weak side of expectations, and a slight slowing from a subdued July of 46k (revised only marginally from 44k).
We suspect payrolls will outperform ADP in August (our forecast is 75k both private and overall) after underperforming in May, June and July but the ADP data suggests the labor market remains in a low hire low fire mode.
ADP detail shows the gain fully explained by education and health at 45k, this a sector that has led most recent payroll gains but has been losing some momentum recently.
Leisure and hospitality, a sector where we see rebound potential in payrolls after two weak months, was also improved at 16k while construction had a solid month, rising by 12k.
Weakness was seen surprisingly in manufacturing, a sector where recent signals have been mostly positive, falling by 17k, while professional and business fell by 16k.
