Slowest job growth since '03

NEW YORK (CNNMoney.com) -- Private sector employers added the fewest workers in August in more than four years, according to a closely-watched employment reading that is watched for clues as to what the Labor Department will report on labor market strength later this week.

Wednesday's reading from payroll services firm ADP found only a 38,000 net gain in jobs in the private sector in August, down from a 41,000 job gain in July. It was the smallest job gain in the ADP report since a 7,000 decline in jobs in June 2003.

The report showed that manufacturers cut 33,000 jobs in the most recent month, while the rest of the goods producing sector, primarily construction, cut an additional 16,000 jobs. But those cutbacks were offset by a gain of 87,000 jobs in the private sector.

The government is due to report on the overall labor market outside of farming jobs this Friday. Economists surveyed by Briefing.com are forecasting that there was a net gain of 110,000 jobs at both private sector and public sector employers in August, up from the 92,000 rise in July. The unemployment rate is forecast to remain at 4.6 percent.

The employment readings are being particularly closely watched this month due to the uncertainty about what the Federal Reserve will do with interest rates at its next meeting on Sept. 18. Many investors and economists are forecasting an interest rate cut, but a much stronger than expected job report could dash those hopes for a rate cut.