Fresh data out Thursday is raising the question of whether the job market is weakening further — and that could cause the Federal Reserve to cut rates by more than a quarter percentage point when officials meet in less than two weeks.
ADP's National Employment Report for August showed 99,000 jobs were added in the month, well below economists’ estimates for 145,000, and fewer than the 122,000 jobs added in July. The August data marked the fifth straight month payroll additions had slowed from the month prior. The release was the fewest jobs added from the private sector in a month since January 2021.
Meanwhile, weekly jobless claims clocked in at 227,000 for the week ended Aug. 31, compared with expectations for 230,000 — a level inconsistent with recession.
The mixed bag of jobs data, which shows cooling hiring but not firing, comes ahead of the all-important non-farm payroll number due out Friday, which will either reverse the weak July jobs report or confirm it.
Policymakers are wrestling with the question of whether a jump in the unemployment rate to 4.3% in July was due to exogenous factors like the impact of a Texas hurricane at the time, or whether it’s the start of a more worrisome trend.