Employment in the U.S. private sector grew by 38,000 in August, the weakest in four years, according to the ADP employment report released Wednesday.
The ADP report suggests nonfarm payrolls may have grown much slower than the 120,000 anticipated by economists. See Economic Calendar.
It was the second straight weak reading in the ADP index; July's reading was revised lower to 41,000 from 48,000 initially reported.
"A deceleration of employment may be under way," ADP said in a release.
First, there is some debate about the accuracy of both the BLS data and ADP data. The BLS data has to deal with the birth/death model adjustments, and the ADP data is a fairly new statistic that is still getting the kinks out.
That being said, this is not the news the economy wants to hear. However, it does play into the bad news = good news because it adds to the possibility of a Fed rate cut at the September meeting.
We'll know more with the Beige Book's release later today.
I've looked at several employment areas that will probably be the first to show weakness here