U.S. businesses created the fewest new jobs in 7 months, ADP says. Hiring slowed in the summer.

U.S. private-sector payrolls rose by just 38,000 in August, according to ADP's latest employment report, marking the weakest monthly gain in seven months. The figure came in well below Wall Street expectations and represents the second consecutive month of subdued hiring, signaling a pronounced summer slowdown in labor demand.

The back-to-back soft prints suggest employers pulled back sharply on headcount expansion during the typically slower summer months. ADP's data covers private businesses and excludes government hiring, making it a closely watched leading indicator ahead of the official Bureau of Labor Statistics employment report.

The sharp deceleration in job creation adds weight to the view that the labor market is cooling after running hot for much of the past year. August's 38,000 addition stands in stark contrast to the six-figure monthly gains that characterized earlier stages of the recovery, and the miss relative to consensus forecasts raises questions about the durability of consumer spending and overall economic momentum heading into the fall.