Vanguard data shows soft hiring in August

The firm tracks new enrollments and separations in Vanguard-administered retirement plans and adjusts the data to compare it with the broader U.S. labor market. But the firm notes an underrepresentation in the face-to-face service sector in its data.

According to the latest data from Vanguard, 8,000 private-sector jobs were added in August.

The firm, which draws on Vanguard 401(k) participant data, said that weak hiring activity remains the defining feature of today’s labor market.

Adam Schickling, senior economist at Vanguard, said he expects August's closely watched non-farm payroll report, due out on Friday, to show slow jobs growth.

“The labor market’s summer soft patch extended into August, with Friday’s employment report likely to show private-sector payroll growth having slowed to just 8,000 jobs,” he said.

“The slowdown appears concentrated in recruiting rather than workforce reductions, leaving new labor force entrants and those seeking employment facing the most difficult conditions.”

Schickling noted that while near-term job growth is likely to stay soft, he expects “some improvement and stabilization in hiring activity as we move into the fall.”

However, the economist said that demographic headwinds and lower participation among key age groups are constraining labor force growth. Because of that, he said, “hiring conditions may not need to improve substantially to keep labor market conditions broadly stable.”