Private employers added 91,000 jobs in August, according to a report from ADP Employer Services issued Wednesday — a modest gain that may soothe some investors’ worries about a recession.
Analysts had predicted that the report — which often serves as a bellwether for the government's monthly employment report due later this week — would show an increase of 100,000 jobs in August. Private employers added 109,000 jobs in July, according to a revised-down figure from ADP.
“It’s tepid, disappointing, but not unexpected, given the recent deceleration in the economy and concerns about hiring that exploded in the month of August,” Joel Prakken, senior managing director of Macroeconomic Advisers LLC, told CNBC. Macroeconomic Advisers jointly develops the ADP report.
The United States is on a recession watch after a massive sell-off in the stock market this summer knocked down consumer and business sentiment. The plunge in share prices followed Standard & Poor's decision to strip the nation of its top notch AAA credit rating and a spreading sovereign debt crisis in Europe.
Earlier Wednesday, consultants Challenger, Gray & Christmas issued a report that shows the number of planned layoffs at U.S. firms fell in August by 23 percent after rising for three straight months, with the government sector again leading the job cuts.
Employers announced 51,114 planned job cuts, down from 66,414 in July, according to the report. Planned cuts in July had marked a 16-month high.
"In August, the private sector once again took a backseat to the government sector, which saw job cuts surge to the second highest monthly total this year," John Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement.
But July's planned job cuts were up 47 percent from August 2010, when they were at 34,768. For 2011 so far, employers have announced 363,334 cuts, somewhat better than the 374,121 cuts announced in the first eight months of 2010.
More job cuts are expected at the federal government level with pressure to cut the federal budget, the report said.
Cuts in the government sector accounted for 18,426 of the announced layoffs in August, and 105,406 for the year so far.
"Meanwhile, the private sector is still being hampered by low consumer and business spending. While we do not see any indication of a sudden resurgence in private-sector job cuts, conditions definitely are not ideal for hiring," said Challenger.
Both employment reports come two days ahead of the key U.S. jobs report, due Friday morning. It is forecast to show nonfarm payrolls increased by 75,000 in August, according to a Reuters survey, slowing from July's 117,000 rise.