Two Reports, Two Directions, Same Month

This week's edition was written by Mona Tawakali, Chief Strategy Officer at Talivity.

The August jobs report landed this morning: payrolls surged by 162,000, more than triple the 53,000 economists expected and the strongest print of the year. Unemployment held at 4.1%. On its own, that's the best headline this newsletter has had to report in months.

Here's the catch. Two days earlier, ADP said the opposite. Private payrolls grew just 38,000 in August, the slowest pace since January, with ADP's own chief economist describing it as "choppy hiring." Two data sources, two days apart, pointing in opposite directions about the same month.

Why the two reports disagree

They're not measuring quite the same thing. ADP tracks a subset of private payroll processing clients; BLS surveys roughly 119,000 businesses and government agencies directly, including public-sector jobs ADP doesn't cover at all. Sample differences this large aren't unusual month to month, but a split this stark, one calling it the weakest month since January and the other calling it the strongest of the year, is worth sitting with rather than picking whichever number supports the story you already wanted to tell.

The revisions flipped direction too

For the past few months, this newsletter has been tracking a pattern of the "current" jobs number getting quietly revised down a month or two later. This report broke that pattern. June was revised up from +20,000 to +31,000, and July was revised up from -23,000 to +21,000, a swing of 44,000 on July alone. Combined, June and July now show 55,000 more jobs than previously reported.

It's also worth noting that the preliminary annual benchmark revision, published August 28, showed employment through March 2026 running 79,000 lower than earlier estimated. Smaller than some had braced for, but a reminder that both the monthly figure and the “true” figure a year’s worth of data eventually settles on can move in different directions in the same month.

Participation rose, and for once, that's a clean signal

Labor force participation ticked up to 61.6% in August, still down half a point since January, but moving the right direction after months of drift. Unlike prior reports where a falling unemployment rate was masking people leaving the labor force, this month's numbers moved together: more people entered the labor force, and more of them found work.

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Healthcare carried last year. This year, it's coasting.

This is the trend worth watching most closely if you're planning headcount. Healthcare added just 13,000 jobs in August, according to BLS, well under its own 32,000-a-month average over the prior year. This is the sector that carried the entire labor market through most of last year, and our own Talent Market Index data showed the cost of attracting healthcare talent hitting an all-time high this spring, 75% above its 2021 baseline, as demand kept outpacing supply. A sector that's decelerating on hiring while its cost to fill roles stays structurally elevated is not returning to normal, it's getting more expensive per hire even as it slows down.

ADP tells a different version again: it put education and health services at +45,000 for August, still the clear leader of its report. Whichever number you trust, the direction across both is the same: healthcare is no longer the outlier of explosive growth it was last year. It's still growing. It's just not carrying the market by itself anymore.

Where the growth is

• Food services and drinking places added 59,000 jobs, nearly five times the 12,000 average over the prior year. The single biggest positive surprise in the report.

• Local government education added 42,000, largely offsetting a decline the month before. BLS notes this category has shown little net change since January 2025, so read this as a bounce-back, not a new trend.

• Manufacturing added 16,000 and is now up 58,000 since a low point in December 2025, led by machinery and fabricated metal products. ADP disagrees sharply here, reporting a 17,000 manufacturing loss for the same month, one of the sharpest splits between the two data sources this cycle.

• Construction added 22,000 in BLS's count and 12,000 in ADP's; different magnitude, same direction, a far less concerning divergence than the one in manufacturing.

Where the contraction is

• Information lost 23,000 jobs, continuing a decline that's averaged 8,000 a month over the past year, concentrated in computing infrastructure and data processing, publishing, and broadcasting.

• Financial activities lost 11,000 in BLS's report, continuing a longer downward trend. ADP again disagrees, showing financial activities up 6,000 for August.

• Little changed across the rest: mining, wholesale trade, retail trade, transportation and warehousing, professional and business services, social assistance, and other services.

Two soft spots hiding inside an otherwise strong report

Long-term unemployment, people out of work for 27 weeks or more, rose to 27.0% of all unemployed people in August, up from 25.5% in July, even as the headline number improved. And wage growth slowed slightly, up 3.1% year-over-year in August versus 3.2% in July. Neither is alarming on its own, but they're a reminder that a strong month at the top doesn't automatically mean strength all the way through.

One flag from last month did resolve itself: the temporary-layoff spike we called out in July (up to 921,000) eased back to 839,000 in August, suggesting that signal didn't turn into the broader softening it sometimes precedes.

What this means going forward

One strong headline month doesn't erase the pattern of downward revisions that preceded it, and it doesn't resolve the fact that BLS and ADP are now telling meaningfully different stories about the same month. What it does mean is that the labor market isn't moving in one clean direction right now. It's moving in several directions depending on which data source, which sector, and which month you're looking at. For hiring plans, that argues for building around sector-specific signals, like healthcare's cost-to-hire staying elevated even as growth slows, rather than leaning on any single month's topline number, from either survey, as the whole story.

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September Talent Market Index Release: Register for our upcoming Talent Market Index release. While the BLS Jobs Report, ADP, and JOLTS track openings, hires, and quits, they don't answer one key question: what does it actually cost to attract talent right now? The TMI measures what employers are spending on paid job ads across nine key segments, giving a real-time view of hiring demand and cost pressure.