U.S. Labor Market Signals Slowdown as ADP and Jobless Claims Disappoint

The ADP National Employment Report for August 2025 showed weak private sector job growth of only 54,000, significantly below the market estimate of roughly 100,000. This emphasized worries about a cooling U.S. labor market as it represented a sharp slowdown from July's adjusted estimate of 104,000 jobs. Though the poor job gains highlighted varied economic momentum across sectors, annual pay grew at 4.4% year-over–year.

Driven by a strong 50,000 jobs in leisure and hospitality, service-providing industries led employment creation with 42,000 new positions. Losses in education and healthcare services (-12,000), utilities (-17,000), transportation, and trade dragged down the figures. With 16,000 in construction and a 7,000 drop in manufacturing, goods-producing industries contributed a meager 13,000 jobs. By company size, medium businesses (50-499 employees) added the most jobs at 25,000; large companies, +18,000; and small firms, +12,000, followed.

Surpassing estimates of roughly 230,000, initial jobless claims for the week ending August 30 increased by 8,000 to 237,000, the highest since June 2025. The four-week moving average rose to 228,500, indicating ongoing demand on the job market. Though continuing claims fell somewhat to 1,954,000, the increase in new claims points to rising worry about job stability, therefore questioning the general economic outlook.