ADP National Employment Report: Private Sector Employment Increased by 54,000 Jobs in August; Annual Pay was Up 4.4%

Rhea-AI Summary

ADP (NASDAQ:ADP) released its August 2025 National Employment Report, showing private sector employment increased by 54,000 jobs, significantly lower than July's revised 106,000 jobs. The report highlights a notable slowdown in hiring momentum across various sectors.

Annual pay growth remained steady at 4.4% for job-stayers and 7.1% for job-changers. Key sector performances include Leisure/hospitality adding 50,000 jobs and Construction gaining 16,000 positions, while Manufacturing lost 7,000 jobs. By establishment size, medium-sized businesses led job creation with 25,000 new positions, followed by large establishments (18,000) and small establishments (12,000).

Positive

• None.

Negative

• Overall job growth significantly decreased to 54,000 from July's 106,000
• Manufacturing sector lost 7,000 jobs
• Trade/transportation/utilities sector declined by 17,000 jobs
• Education/health services sector decreased by 12,000 positions

Insights

Labor Economist

August showed significant hiring slowdown with just 54K jobs added, suggesting economic uncertainty despite wage growth remaining steady at 4.4%.

The August ADP report reveals a substantial hiring deceleration with private employers adding only 54,000 jobs, a sharp decline from July's revised 106,000. This represents one of the weakest monthly gains since the post-pandemic recovery began. The labor market is showing clear signs of cooling after starting the year with robust growth.

The sectoral breakdown reveals a mixed picture: leisure/hospitality added a robust 50,000 jobs while construction contributed 16,000 positions. However, several key sectors contracted, with trade/transportation/utilities shedding 17,000 jobs, education/health services losing 12,000, and manufacturing declining by 7,000. This pattern suggests consumers may be shifting spending from goods to services, though the overall weakness spans multiple sectors.

Annual wage growth held steady at 4.4% for job-stayers and 7.1% for job-changers. This pay growth resilience despite slowing job creation indicates persistent labor market tightness in certain sectors. The wage-price dynamics remain complex, with financial activities showing the highest wage growth at 5.1% among job-stayers.

Regionally, the Northeast and Midwest performed relatively well, while the South saw minimal growth. The labor market appears to be responding to multiple pressures including Dr. Richardson's cited factors: labor shortages, consumer uncertainty, and potential AI disruptions reshaping workforce needs.

ROSELAND, N.J., Sept. 4, 2025 /PRNewswire/ -- Private sector employment increased by 54,000 jobs in August and pay was up 4.4 percent year-over-year according to the August ADP National Employment Report® produced by ADP Research in collaboration with the Stanford Digital Economy Lab ("Stanford Lab").  

The ADP National Employment Report is an independent measure of the labor market based on the anonymized weekly payroll data of more than 26 million private-sector employees in the United States. ADP's Pay Insights captures nearly 14.8 million individual pay change observations each month.  Together, the jobs report and pay insights use ADP's fine-grained data to provide a representative and high-frequency picture of the private-sector labor market.

"The year started with strong job growth, but that momentum has been whipsawed by uncertainty," said Dr. Nela Richardson, chief economist, ADP. "A variety of things could explain the hiring slowdown, including labor shortages, skittish consumers, and AI disruptions."

August 2025 Report Highlights

View the ADP National Employment Report and interactive charts at www.adpemploymentreport.com.

JOBS REPORT

Private employers added 54,000 jobs in August
Leisure and hospitality and construction performed well despite a broader month-over-month slowdown in hiring.

Change in U.S. Private Employment:     54,000

Change by Industry

- Goods-producing:     13,000

• Natural resources/mining     4,000
• Construction     16,000
• Manufacturing     -7,000

- Service-providing:     42,000

• Trade/transportation/utilities     -17,000
• Information     7,000
• Financial activities     -2,000
• Professional/business services     15,000
• Education/health services     -12,000
• Leisure/hospitality     50,000
• Other services     1,000

Change by U.S. Regions

- Northeast:     15,000

• New England     7,000
• Mid-Atlantic     8,000

- Midwest:     14,000

• East North Central     17,000
• West North Central     -3,000

- South:     4,000

• South Atlantic     4,000
• East South Central     15,000
• West South Central     -15,000

- West:     8,000

• Mountain     -4,000
• Pacific     12,000

Change by Establishment Size

- Small establishments:     12,000

• 1-19 employees     10,000
• 20-49 employees     2,000

- Medium establishments:     25,000

• 50-249 employees     18,000
• 250-499 employees     7,000

- Large establishments:     18,000

• 500+ employees     18,000

PAY INSIGHTS

Pay gains were little changed in August
Year-over-year pay growth was 4.4 percent for job-stayers and 7.1 percent for job-changers.

Median Change in Annual Pay

- Job-stayers     4.4%

- Job-changers     7.1%

Median Change in Annual Pay for Job-Stayers by Industry

- Goods-producing:                                                    

• Natural resources/mining     4.3%
• Construction     4.4%
• Manufacturing     4.7%

- Service-providing:                                               

• Trade/transportation/utilities     4.2%
• Information     4.2%
• Financial activities     5.1%
• Professional/business services     4.2%
• Education/health services     4.4%
• Leisure/hospitality     4.5%
• Other services     4.1%

Median Change in Annual Pay for Job-Stayers by Firm Size

- Small firms:                                                                

• 1-19 employees     2.5%
• 20-49 employees     4.0%

- Medium firms:                                                             

• 50-249 employees     4.7%
• 250-499 employees     4.7%

- Large firms:                                                                

• 500+ employees     4.8%

To see Pay Insights by U.S. State, Gender, and Age for Job-Stayers, visit here:

The July total number of jobs added was revised from 104,000 to 106,000.

For additional information about the ADP National Employment Report, including historical files, employment and pay data, methodology, and a calendar of release dates, please visit https://adpemploymentreport.com/.    

The September 2025 ADP National Employment Report will be released on October 1, 2025 at 8:15 a.m. ET.

About ADP Research
The mission of ADP Research is to make the future of work more productive through data-driven discovery. Companies, workers, and policy makers rely on our finely tuned data and unique perspective to make informed decisions that impact workplaces around the world.

To subscribe to monthly email alerts or obtain additional information about ADP Research, including employment and pay data, methodology, and a calendar of release dates, please visit https://www.adpresearch.com.    

About ADP (NASDAQ: ADP)
ADP has been shaping the world of work with innovation and expertise for more than 75 years. As a global leader in HR and payroll solutions, ADP continuously works to solve business challenges for our clients and their workers, from simple, easy-to-use tools for small businesses to fully integrated platforms for global enterprises – and everything in between. Always Designing for People means we're focused on just that – people. We use our unmatched AI-driven insights and proven expertise to design innovative solutions that help people achieve greater success at work. More than 1.1 million clients across 140+ countries rely on ADP's exceptional service to support their people and drive their business forward. HR, Talent, Time Management, Benefits, Compliance, and Payroll. Learn more at ADP.com

ADP, the ADP logo, and Always Designing for People, ADP National Employment Report, and ADP Research are registered trademarks of ADP, Inc. All other marks are the property of their respective owners.

Copyright © 2025 ADP, Inc. All rights reserved.

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SOURCE ADP, Inc.

FAQ

What was ADP's private sector job growth in August 2025?

According to ADP's report, private sector employment increased by 54,000 jobs in August 2025, down from July's revised figure of 106,000 jobs.

Which sectors showed the strongest job growth in ADP's August 2025 report?

The leisure/hospitality sector led job growth with 50,000 new positions, followed by construction with 16,000 jobs and professional/business services with 15,000 jobs.

What was the annual pay growth rate for job-stayers and job-changers in ADP's August report?

Annual pay growth was 4.4% for job-stayers and 7.1% for job-changers, showing continued wage pressure in the labor market.

How did different-sized businesses perform in ADP's August 2025 employment report?

Medium-sized establishments (50-499 employees) led with 25,000 new jobs, large establishments (500+ employees) added 18,000 jobs, and small establishments (1-49 employees) contributed 12,000 jobs.

What were the main factors affecting employment growth according to ADP's chief economist?

According to Dr. Nela Richardson, ADP's chief economist, the hiring slowdown could be attributed to labor shortages, skittish consumers, and AI disruptions.