Job creation among private employers slowed for the fourth straight month, per ADP’s Employment Report, which showed employers added 122,000 new jobs in July versus the 150,000 that had been forecasted. Large gains in trade and transportation, construction, and leisure and hospitality were offset by losses seen in the information and professional and business services sectors.
Small businesses also continue to struggle, as those with fewer than 50 employees lost 7,000 jobs. This is compared to 132,000 new jobs added among medium and large companies combined.
What’s the bottom line? Job growth is clearly slowing, while annual pay gains also decelerated for both job-stayers (+4.8% from +4.9%) and job changers (+7.2% from +7.7%). The Fed is watching this closely, as it can help alleviate wage-pressured inflation. Nela Richardson, Chief Economist, ADP, noted, “With wage growth abating, the labor market is playing along with the Federal Reserve’s effort to slow inflation. If inflation goes back up, it won’t be because of labor.”
