US jobless claims rise, private payrolls growth slows

The number of Americans filing new applications for unemployment benefits increased more than expected last week, while hiring by private employers slowed in August, offering further evidence that labor market conditions were softening.

The reports were released a day after government data showed there were more unemployed people than positions available in July for the first time since the COVID-19 pandemic. Job growth has shifted into stall-speed, with economists blaming President Donald Trump's sweeping import tariffs and an immigration crackdown that is hampering hiring at construction sites and restaurants.

The Fed's "Beige Book" report on Wednesday noted that "firms were hesitant to hire workers because of weaker demand or uncertainty." The softening labor tone was reinforced on Thursday with the release of the ADP National Employment Report, which showed private employment increased by 54,000 jobs last month after advancing by 106,000 in July.

The downbeat assessment of the labor market was also evident in the Institute for Supply Management survey, which showed a measure of services sector employment contracting for a third straight month in August. Economists, as a result, are bracing for another month of tepid job growth when the Labor Department's Bureau of Labor Statistics publishes its closely watched employment report on Friday. A Reuters survey of economists estimated nonfarm payrolls increased by 75,000 jobs last month after rising by 73,000 in July.