U.S. hiring picked up speed in August but still missed estimates, ADP says

Hiring data reported Wednesday were less than half the 1.17 million projected, according to ADP. However, the private payroll firm's counts have veered significantly from the government's since the pandemic began in March.

Economists are cautiously optimistic heading into fall, as more Americans begin returning to work and school, even as U.S. coronavirus cases now surpass 6 million and at least 181,000 Americans have died. Clusters of infections have been reported in newly reopened college campuses and high schools, factories and other workplaces.

On Wednesday, ADP also revised July's job gains from 167,000 to 212,000. By comparison, the Labor Department said 1.8 million jobs were created that month, bringing the unemployment rate down to 10.2%.

"The August job postings demonstrate a slow recovery," Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a release. "Job gains are minimal, and businesses across all sizes and sectors have yet to come close to their pre-COVID-19 employment levels."

Nearly all of last month's job growth came in service sectors, ADP reported. The 389,000 new positions spanned trade and transportation, leisure and hospitality, and education and health, as the back-to-school season got underway and states continued to ease up on restrictions on travel and business. The goods-producing sector created 40,000 jobs, mostly in construction. Information jobs fell by 1,000.

Large companies, or those with at least 500 employees, added the most jobs, at 298,000. Small businesses, or those with fewer than 50 workers, lagged across all industries but still gained a net 52,000 employees in August. Midsized employers expanded by 79,000 workers.

Federal employment data has not lined up with ADP's numbers. The firm, for example, said more than 4.3 million positions were created in June and 3.1 million in May. The Labor Department put those numbers at 4.8 million and 2.7 million, respectively.

The agency releases weekly jobless claims data on Thursday and its August jobs report, which tallies private- and public-sector employment, on Friday.

As of last week, roughly 27 million people are receiving some form of unemployment insurance, according to the Labor Department.

The slow jobs recovery would seem to contradict the monster advance playing out on Wall Street. The Standard & Poor's 500 and Dow Jones industrial average chalked up their best August in more than three decades. On Tuesday, the S&P 500 and Nasdaq composite set record highs and were on pace to break them again on Wednesday.

"The recovery in jobs lost in this pandemic recession was always a weak one, especially in service-sector employment like retailing, hotels, and bars and restaurants," Chris Rupkey, chief financial economist for MUFG, said in an email, "but now for a second month in a row it is looking like the jobs are not going to come back unless there is more stimulus from Washington to bolster economic demand and keep business activity and consumer spending growing."