The pace of hiring among private-sector employers in the United States showed a slowdown in July, while wage growth continued to decelerate. According to the ADP National Employment Report released on Wednesday, employment in the nonfarm private sector increased by 324,000, down from 455,000 in June. Economists had anticipated an increase of 175,000, as noted in a poll conducted by The Wall Street Journal.
It is worth mentioning that June's initial figure of 497,000 was revised downward. Moreover, the survey conducted by ADP reveals that annual wage growth stood at 6.2% in July, down from 6.4% in June. This trend reflects the ongoing deceleration in wage growth that has been observed in recent months. The ADP survey derives its data from the salaries of nearly 10 million individual employees over a 12-month period.
Nela Richardson, the chief economist at ADP, stated that there is a continued slowdown in pay growth without widespread job loss. She also commented on the resilience of the economy and emphasized that a robust labor market continues to support household spending.
Leisure and hospitality led the way in employment gains, adding over 200,000 jobs in July. Small- and medium-sized businesses contributed significantly to the overall employment growth, with the addition of 237,000 and 138,000 jobs, respectively. However, large businesses experienced a loss of approximately 67,000 positions.
Geographically, the Northeast saw the greatest increase in job numbers, while job figures declined in the South. In terms of industries, goods producers recorded an addition of 21,000 jobs. Construction saw a rise of 9,000 new payrolls, and natural resources and mining contributed 48,000 jobs. On the other hand, manufacturing jobs declined by 36,000, marking a fifth consecutive month of downturns in this rate-sensitive industry.
It is important to note that the ADP estimate is derived from aggregated payroll data of more than 25 million U.S. workers and is independent of the official data released by the U.S. Labor Department. Consequently, there can be significant divergences between the ADP series and the Labor Department's data.
According to data released by the Labor Department on Tuesday, the labor market has experienced a slight easing and a decline in job openings. However, job openings still remain notably higher than pre-pandemic levels, as indicated by the figures provided by the department.
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