The private sector added 99,000 jobs in August, while annual pay grew 4.8% year-over-year, payroll giant ADP reported Thursday, as the job market showed further signs of a cooldown.
The service-providing sector added 72,000 jobs, including 29,000 in education and health services, and 18,000 in financial activities like banking. However, the professional and business services sector, which includes accounting and tax preparation, lost 16,000 jobs last month.
"That's both the very technical jobs that require a lot of skills development, but also it's office support roles, and the labor market has changed with fewer people going into the office," said ADP chief economist Nela Richardson during a conference call Thursday with reporters. "There's been a push and pull in professional and business services, and we're seeing that pull play out with 16,000 jobs shed this month."
The goods-producing sector added 27,000 jobs last month, including 27,000 in construction and 8,000 in natural resources and mining, offset by a loss of 8,000 manufacturing jobs.
Small businesses with between 1 and 19 employees added 3,000 jobs last month, but those with between 20 and 49 employees lost 12,000 jobs. Medium-size establishments with between 50 and 249 employees added 32,000 jobs, while those with between 250 and 499 employees added 36,000. Large establishments with 500 employees or more added 42,000 jobs in August.
Year-over-year pay gains were basically flat in August, remaining at 4.8% for job-stayers and 7.3% for job-changers. For professional and business services, the percentage for job stayers was 4.7%.
"Job stayer pay growth has been at 4.8% over the last 12 months, and job changers who switch within the year has been about 7.3%, and the difference between those is at about two and a half percent, and that's also been stable," said Richardson. "What that shows us overall is that wages are not being triggered by inflation. They're not playing a role in any inflation outburst, and they are stabilizing to a higher level than they were pre-pandemic. That is consistent with the fact that inflation is higher than it was pre-pandemic, and the good news of this jobs report is that real wages are still growing. Yes, this is lower than normal job growth, but remember, this is not shedding of jobs. We're far from that: 99,000 is respectable."
