Employers added 177,00 jobs in August as the leisure and hospitality sector pulled back sharply from its recent hiring surge, private payroll firm ADP reported on Wednesday.
The number was below estimates of 195,000 and down from the 324,000 reported in July.
"This month's numbers are consistent with the pace of job creation before the pandemic," said Nela Richardson, chief economist, ADP. "After two years of exceptional gains tied to the recovery, we're moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede."
The hospitality industry cooled significantly, adding only 30,000 jobs. Education and health services, laggards during the pandemic, added 52,000 while employment in trade, transportation and utilities increased by 45,000.
Wages, meanwhile, rose at an annual rate of 5.9%, the slowest pace since September of 2021.
On Tuesday, in another sign of the labor market cooling, the number of job openings fell to 8.8 million as of the end of July. The number is the lowest since early 2021.
“The labor market is cooling and is taking pressure off policy makers concerned with a second wave of inflation,” said Jeffrey Roach, chief economist at LPL Financial. “Businesses should get some respite as inflation decelerates and the risk of quiet quitting dissipates.”
Meanwhile, the second estimate of gross domestic product came in slightly down to 2.1% on Wednesday from the prior 2.4% annual number based on a decline in exports. That is above the 2% rate seen in the first quarter but well below current estimates of economic growth in the third quarter that are now running at 5.9%.
That is a number that will likely come down as the weeks go by and more fresh data comes in, but it is one that will likely cause some concern at the Federal Reserve as it looks for an economic slowdown to help bring inflation down to the central bank’s 2% annual target.
The Fed meets in late September to consider interest rate policy with most analysts expecting no change, although there is an expectation the Fed could lift rates again in November if the economic data remains too strong.
One key data point will be the jobs report for August, due out on Friday with expectations of a gain of 169,000 jobs in the month.
“It looks like the economy is accelerating,” says Steve Wyett, chief investment strategist at BOK Financial. “Second quarter earnings were down, but not by as much as expected.”
Still, Wyett says the record levels of consumer indebtedness could eventually lead to a pullback.
“I’m a little worried about the consumer,” he says.
微信
移动端
