ADP data show slower August job growth

U.S. private-sector employment grew by 38,000 jobs in August 2026, marking the slowest monthly increase since January. The figure represents a deceleration from an upwardly revised gain of 46,000 jobs in July. The August tally also fell short of a Dow Jones consensus estimate of 47,000 jobs. The ADP (ADP) National Employment Report characterizes August as a period of choppy hiring conditions in the private sector.

The report indicates that the modest overall gain masks sizable divergences across industries and employer sizes. While several service industries continued to add workers, parts of the goods-producing and professional sectors registered job cuts. Overall, the data portray a labor market that is still expanding but at a more restrained pace than earlier in the year.

Service-providing industries generated a net increase of 48,000 jobs in August. Education and health services led all categories with a gain of 45,000 positions, underscoring ongoing demand for workers in those fields. Leisure and hospitality added 16,000 jobs, and financial activities increased payrolls by 6,000. These increases helped offset weakness elsewhere in the economy.

Several key sectors shed jobs during the month. Manufacturing employment declined by 17,000, while professional and business services lost 16,000 positions. Trade, transportation, and utilities reduced employment by 5,000, and the information sector cut 4,000 jobs. In the goods-producing segment overall, payrolls fell by 10,000 jobs, as losses in manufacturing and natural resources and mining outweighed a 12,000-job gain in construction.

Job creation in August was heavily concentrated among large businesses. Establishments with 500 or more employees added 34,000 jobs, accounting for nearly all of the net private-sector gain. Medium-size employers showed essentially no net change in employment. Small establishments added 3,000 jobs overall, with gains of 20,000 at the very smallest firms partly offset by losses of 17,000 among employers with 20 to 49 workers.

This distribution suggests that larger organizations continued to expand their workforces even as smaller and mid-size firms were more cautious. Almost all of the net increase in employment came from companies with 500 or more workers, while firms with fewer than 50 employees contributed only modest growth.

ADP’s (ADP) Pay Insights for August show that pay gains remained positive but moderate. For all private-sector workers, base pay rose 3.2% year over year, and gross pay increased 4.7%. For job-stayers, base pay rose 3.0% and gross pay 4.4%, while job-changers saw base pay growth of 4.7% and gross pay growth of 7.3%. ADP noted that pay growth has been decelerating over the past four years, aligning with a cooling in labor demand.

The August report also introduced enhanced Pay Insights, with deeper analytics and expanded geographic coverage across 56 metropolitan areas. ADP highlighted that pay data can provide additional perspective on the evolving hiring environment. Together, the employment and pay figures point to a private labor market that is still adding jobs but at a slower pace, with wage pressures easing compared with prior years.