Data show fewer new jobs than forecast in August

Payrolls were up by 428,000, signaling moderate hiring as restrictions are lifted.

U.S. companies added fewer jobs than expected in August, suggesting the labor market rebound remains gradual, with employment well below pre-pandemic levels.

Businesses’ payrolls increased by 428,000 after an upwardly revised 212,000 in July, according to ADP Research Institute data released Wednesday. The median projection in a Bloomberg survey of economists called for a 1 million gain for the latest month.

The figures come just before the government’s monthly jobs report on Friday, which is forecast to show private payrolls increased by nearly 1.3 million, the fourth straight month of gains. The unemployment rate is expected to fall to 9.8%, the first single-digit print since March.

Service-provider employment increased 389,000 in August, reflecting gains in leisure and hospitality and health care, according to ADP. Payrolls at goods producers rose 40,000 last month, largely reflecting a jump in employment at construction companies.

The latest data suggest companies continue to hire at a more moderate pace than immediately following the lifting of business lockdowns months ago. Amid widespread joblessness, it will take sustained demand growth to rebuild the labor market to what it was before the pandemic.

Yet, headwinds remain. The Paycheck Protection Program, which helped support employment in recent months, expired in August, and lawmakers have yet to pass an another comprehensive stimulus package. Meanwhile, companies continue to announce layoffs almost six months after the COVID-19 shutdowns.

CHAD RHYM / NEW YORK TIMES Emily Magnuson paints a table as part of a project through a nonprofit, The Downtown District, in Iowa City, Iowa. Service-provider employment increased 389,000 in August.