U.S. August ADP Hits Lowest Record

　　On September 5, data released by ADP Research Institute in collaboration with the Stanford Digital Economy Laboratory showed that U.S. ADP employment numbers increased by only 99,000 in August, marking the lowest level since January 2021 and falling far short of the expected 145,000 and the previous value of 122,000.

　　Image Source: Wall Street Journal

　　At the same time, the U.S. Department of Labor reported that job openings in July also dropped to their lowest point since January 2021. A report from employment firm Challenger, Gray & Christmas revealed that August saw the most severe layoffs since 2009, and 2024 is on track to be the slowest year for hiring since the metric was first tracked in 2005.

　　Despite the slowdown in hiring, several industries continued to increase recruitment in August, with only a few industries reporting actual layoffs. Following the ADP data release, unemployment claims data showed that for the week ending August 31, initial claims for unemployment benefits were 227,000, below the expected 230,000; while continuing claims for unemployment benefits were 1.838 million, also below the expected 1.869 million.

　　Although these indicators have decreased, the drop in unemployment claims may help alleviate concerns about a worsening labor market.

　　Overall, the layoff situation has improved. In August, only three industries experienced layoffs, while seven other industries increased employment. Specifically, professional and business services laid off 16,000 people, manufacturing laid off 8,000 people, and information services laid off 4,000 people; education and health services added 29,000 jobs, construction added 27,000 jobs, and other services added 20,000 jobs; financial activities added 18,000 jobs, trade, transportation, and utilities added 14,000 jobs; additionally, mining added 8,000 jobs and entertainment added 11,000 jobs.

　　After the data release, recession expectations have resurfaced, leading to increased expectations for a significant rate cut by the Federal Reserve in September. U.S. Treasury yields dipped briefly, and the dollar index also fell. The CME FedWatch Tool shows that the probability of a 25 basis point rate cut in September has decreased to 55%, while the probability of a 50 basis point rate cut has risen to 45%.