Delta variant takes bite out of job growth, according to ADP’s latest report

The job market’s recovery from the COVID-19 pandemic has taken a downturn amid the rise of the Delta variant, according to the latest monthly report from Roseland-based human resources and payroll company ADP.

ADP said in its latest National Employment Report that the nation’s private-sector employment grew by 374,000 jobs in August.

“Our data, which represents all workers on a company’s payroll, has highlighted a downshift in the labor market recovery,” Nela Richardson, chief economist for ADP, said in a prepared statement. “We have seen a decline in new hires, following significant job growth from the first half of the year.

“Despite the slowdown, job gains are approaching 4 million this year, yet still 7 million jobs short of pre-COVID-19 levels.”

Midsized businesses of 50-499 employees leading the way with 149,000 job gains. Large businesses of 500-plus workers added 138,000 jobs, while small businesses of under 50 employees lagged with 86,000 jobs added.

“Job gains across company sizes grew in lockstep, with small businesses trailing a bit more than usual,” Richardson said.

The service-providing sector added 329,000 of the jobs, while the goods-producing sector added 45,000 positions. Leisure and hospitality led the way among industries, adding 201,000 jobs. Among goods-producing industries, construction had the most job gains, at 30,000 workers added.

Although no industries lost jobs, the information industry was flat, ADP noted.

“Service providers continue to lead growth, although the Delta variant creates uncertainty for this sector,” Richardson said.

Mark Zandi, chief economist for Moody’s Analytics, agreed.

“The Delta variant of COVID-19 appears to have dented the job market recovery,” he said in a statement. “Job growth remains strong, but well off the pace of recent months. Job growth remains inextricably tied to the path of the pandemic.”