Private payroll growth missed forecasts for a third consecutive month in August, according to figures released Wednesday by payroll processing firm ADP.

Employers across the private sector added just 38,000 jobs last month, marking their slowest pace of hiring since January. Economists surveyed by Bloomberg and Dow Jones had estimated closer to 50,000 additions.

The August employment report from ADP included an upward revision to 46,000 job gains in July compared to initial estimates of 44,000, though that still represents a considerable miss relative to the 75,000 additions that had been forecast.

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Private hiring in August was concentrated among education and healthcare, the construction sector and leisure and hospitality employers. Those areas of the economy have regularly outperformed on the hiring front in 2026, as a “low hire, low fire” trend has persisted since the second half of 2025.

While hiring for residential construction has slowed amid a contraction in new-home building activity, demand for workers to build infrastructure needed for artificial intelligence has surged.

Large firms with more than 500 employees drove the monthly growth in hiring, adding roughly 34,000 positions, followed by 20,000 job gains among the smallest companies with fewer than 20 employees.

Meanwhile, ADP reported that firms in manufacturing, professional services and information-related sectors shed jobs in August, with manufacturing dropping 17,000 positions and business services firms losing 16,000. Education and healthcare added 45,000 jobs in August, while leisure and hospitality firms added another 16,000.

The U.S. Bureau of Labor Statistics (BLS) this week reported slower hiring across manufacturing firms over the summer, flagging a 13.5% monthly decline in manufacturing hires in July in its latest Job Openings and Labor Turnover Survey results, published Tuesday.

ADP’s report on Wednesday precedes the official August jobs report the BLS is scheduled to publish Friday. The BLS reported an unexpected decline of 23,000 jobs in July, though the unemployment rate improved to 4.1%.

Declining labor demand over the past year has been met with a parallel decline in new labor supply amid the Trump administration’s restrictive immigration agenda and a drop-off in labor force participation rates that hovered around early 2021 levels last month.

Private payroll growth tracked by ADP has been steadily declining since April and May, when private hiring expanded by more than 100,000 jobs for back-to-back months. June hiring fell off to 95,000 additions before even steeper drops to 46,000 in July and 38,000 in August.

Besides heightened trade tensions and elevated inflation, advancements in AI have also produced hiring uncertainty as firms balance current staffing needs with investments in new technologies that could replace human workers.

Economists polled by Reuters expect that the August jobs report due out Friday will reveal 56,000 nonfarm payroll additions, representing a rebound from negative growth in July, with the jobless rate unchanged at 4.1%.