Job Growth in U.S. Moves from ‘Exceptional’ to ‘Sustainable’

ADP, Jobs, Employment

American employers added fewer jobs than anticipated in August, according to new findings from ADP.

The research group said in a news release Wednesday (Aug. 30) that private employers in the U.S. added 177,000 jobs during the month, down from the revised total of 371,000 in July. ADP also found that pay growth slowed, both for people who switched jobs and kept their posts.

Economists polled by Dow Jones expected August’s report to show 200,000 new jobs, per a report by CNBC.

“This month’s numbers are consistent with the pace of job creation before the pandemic,” Nela Richardson, chief economist at ADP, said in the release. “After two years of exceptional gains tied to the recovery, we’re moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede.”

The news comes as middle-income consumers — those who make between $50,000 and $100,000 — find themselves caught in a “crunch” as inflation growth trends upwards and real wages stagnate. 

“While these issues plague all consumers, this demographic has the most consumers just making enough to get by while paying their bills,” PYMNTS wrote last week. 

This could be a consequence of being stuck between consumers making under $50,000 annually who might be eligible for assistance and those making more than $100,000 who may be able to more easily afford a savings cushion. 

This caught-in-the-middle status could be a key driver in this income demographic’s financial lifestyle, as noted in July’s New Reality Check: The Paycheck-to-Paycheck Report,” a PYMNTS collaboration with LendingClub. Almost half of middle-income consumers — 46% of those making between $50,000 and $100,000 — live paycheck-to-paycheck while still able to cover their bills.

Meanwhile, consumers are feeling less confident about the economy, per new findings by the Conference Board, which said this week that its Consumer Confidence Index reading for August came in at 106.1, down from 114 in July. The consensus estimate had been for 116. In addition, the survey found that consumers’ view of current conditions dropped to 144.8 from 153. 

“Perhaps among the more notable stats here: The index for future expectations was at 80.2, down from 88 in July,” PYMNTS wrote. “The Conference Board has stated that readings below 80 for future expectations tend to signal a recession in the subsequent year.”