"The decline in August continues the recent trend in employment that is consistent with an economy that is growing slowly but has not fallen into recession," said Joel Prakken, Chairman of Macroeconomic Advisers, in a written statement.
The August decline was lead by a drop of 78,000 jobs among goods-producing companies, the 21st monthly decline in a row, according to ADP. The service sector, however, gained 45,000 jobs in August.
Large companies, defined as those with 500 or more workers, lost 28,000 jobs in August and medium-sized companies, with between 50 and 499 employees, lost 25,000 jobs.
Small businesses, with less than 50 workers, gained 20,000 workers in August, after adding a revised 46,000 jobs in July.
The report showed a sharp drop-off from July, when the private sector gained 1,000 jobs, spurred by a boost in small business employment. The July reading was revised down from an increase of 9,000 jobs.
The data used in the ADP National Employment Report was taken from ADP payroll data which averaged 399,000 payrolls for 24 million U.S. employees in the first six months of 2008. The data set used for this month's report was approximately the same size.
The U.S. Department of Labor will release its August employment report Friday. A consensus of economists surveyed by Briefing.com expects the unemployment rate to hold steady at 5.7%, while non-farm payrolls are seen declining by 75,000 after a 51,000 drop in July.
In another separate read on the labor market released Wednesday, employers said they would cut 377,325 jobs from May to August, according to employment consulting firm Challenger, Gray & Christmas, Inc. That is the highest level of summer job cut announcements since 2002 and represents nearly 30% more cuts than during the first four months of the yea