Transportation Jobs Up in July ADP Data; Overall Hiring Slows
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US companies added the fewest number of workers since the start of the year and wage growth slowed, consistent with signs of a softer labor demand. But the transportation sector showed resilience.
Private payrolls increased 122,000 in July, according to the ADP Research Institute. The median estimate in a Bloomberg survey of economists called for a 150,000 gain. The trade, transportation and utilities sector added 61,000 jobs in July.
Wage growth slowed to the smallest pace since 2021 for workers who changed jobs, as well as those who stayed, according to data published July 31 in collaboration with Stanford Digital Economy Lab.
Several industries cut jobs this month, led by professional services, information and manufacturing. Most of the cuts were concentrated in small businesses of about 20 to 49 employees, the data show.
Year over year, job-changers got a 7.2% pay increase, down from 7.7% in June, while workers who stayed saw a 4.8% gain.
The ADP figures are consistent with signs of a gradual slowdown in hiring across most sectors. Joblessness has been on the rise in recent months, and so have the number of Americans applying for unemployment benefits.
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Federal Reserve policymakers have been watching closely for any deterioration in the labor market as they kept interest rates at a two-decade high. Fed Chair Jerome Powell is expected to signal the central bank will start cutting them this year following its two-day meeting later July 31.
A broad gauge of US labor costs closely watched by the Fed cooled in the second quarter by more than forecast, supporting a trend of gradually easing inflationary pressures, according to a separate report Wednesday. The employment cost index, which measures wages and benefits, increased 0.9% in the April-to-June period.
Economists also anticipate a moderation in job growth in the Aug. 2 monthly employment report from the government, which includes data from the private and public sectors. The median estimate of a 175,000 gain in nonfarm payrolls would be a step-down from the two previous months. It remains to be seen whether the transportation sector will maintain its strong hiring momentum in this report.
ADP bases its findings on payroll data covering more than 25 million US private-sector employees.
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