ROSELAND, N.J. — The ADP National Employment Report showed private sector hiring slowed sharply in August, with employers adding 54,000 jobs, while annual pay growth held steady at 4.4%. The report, released Thursday by ADP Research in collaboration with Stanford Digital Economy Lab, highlights a labor market losing momentum after a robust start to 2025.
Chief economist Dr. Nela Richardson noted the year began with strong job creation, but hiring has been weighed down by labor shortages, shifting consumer sentiment, and the disruptive effects of artificial intelligence on some industries.
Jobs Report Breakdown
While the overall gain was modest, sector performance was uneven. Leisure and hospitality led with 50,000 new positions, followed by construction, which added 16,000. Professional and business services contributed 15,000 jobs.
In contrast, manufacturing shed 7,000 jobs, while education and health services lost 12,000. Trade, transportation, and utilities also posted a net decline of 17,000.
Regional hiring patterns reflected a mixed picture. The Northeast and Midwest both gained 15,000 and 14,000 jobs respectively, while the South and West reported weaker numbers, including a 15,000 job loss in the West South Central region.
By company size, medium-sized businesses (50–249 workers) led hiring with 25,000 new roles. Large employers added 18,000, while small firms contributed 12,000.
Wage Growth Trends
On pay, job-stayers saw average annual wage increases of 4.4%, while job-changers enjoyed higher gains of 7.1%.
The strongest wage growth for job-stayers came from financial activities (5.1%) and manufacturing (4.7%). Larger firms, with more than 500 employees, offered median raises of 4.8%, outpacing smaller firms with fewer than 20 workers, where pay growth was just 2.5%.
Broader Outlook
ADP revised July’s job growth upward, from 104,000 to 106,000, but the August slowdown raises questions about the sustainability of private sector hiring through the second half of 2025.
The next ADP National Employment Report is scheduled for release on October 1, 2025, offering another data point ahead of the Federal Reserve’s policy meetings and the closely watched Bureau of Labor Statistics report.
As uncertainty continues to shape the labor market, policymakers and investors will be closely monitoring the balance between slowing job growth and still-elevated wage gains.
