U.S. ADP Numbers Disappoint in August

American private firms created far fewer jobs than expected in August as the COVID resurgence coincided with cutbacks in hiring, according to a report Wednesday from payroll services firm ADP.

Private payrolls rose just 374,000 for the month, well below the Dow Jones estimate of 600,000 though above July’s 326,000, which was revised downward slightly from initial 330,000 reading.

The agency also says most of the new jobs came from leisure and hospitality, which added 201,000 positions in a somewhat hopeful sign that an industry beset by a labor shortage continues to recover.

Education and health services combined to add 59,000 for the month as hospitals in some parts of the country were swamped with virus cases and schools begin to reopen.

The developments come at a pivotal time.

Following a robust recovery from the shortest but steepest recession in U.S. history, economic data of late has been disappointing, possibly reflecting pullbacks from this summer’s surge of the COVID delta variant. The U.S. has been averaging about 150,000 new cases a day following a burst in July and August.

Markets are awaiting Friday’s non-farm payrolls report, which is expected to show 720,000 new jobs added and an unemployment rate falling to 5.2%, according to Dow Jones estimates.