The ADP Payroll Report is a monthly economic indicator that provides insights into employment trends in the private sector of the U.S. economy. Produced by ADP, a payroll processing company, it details the number of jobs added or lost in various industries and sectors. The statistics are often used by analysts, economists, and policymakers to gauge labor market conditions and make economic forecasts.
The ADP Payroll Report is typically released on the first Wednesday of each month (Thursday for this year's August edition). The timing helps gauge employment trends ahead of the more detailed Bureau of Labor Statistics' Employment Situation report, which is usually released on the first Friday of the month.
What we learned from the August report...
ADP estimated that August private payrolls rose at the slowest pace since 2021.
Private payroll growth decelerated for the fifth consecutive month.
Smaller companies are feeling the pressure to cut labor costs more than larger companies. Firms with 20–49 employees shed jobs in August.
Workers who switch jobs continue to receive outsized gains in their compensation. Annual pay rose 7.3% in August for those who switched jobs, in contrast to the 4.8% increase for those who remained at the same employer.
Tomorrow’s official payroll report could be softer-than-expected given the slowdown in ADP estimates. If the payroll report surprises investors and comes in weaker than expected, the likelihood of a 50 basis point cut increases at the upcoming Fed meeting.