US job market shows resilience with hiring numbers doubling predictions
The United States private sector witnessed a slowdown in hiring activities in July. However, the number of hires in the US job market was almost double what was anticipated by analysts. This information was provided by ADP, a reputable payroll firm, this Wednesday, indicating fortitude in the employment market.
Despite the Federal Reserve’s expeditious series of interest rate hikes since March 2022, designed to temper demand — through the increase in borrowing expenses for activities like business growth — the labour market in the US remains durable. ADP reported that new recruitments clocked in at 324,000 last month, experiencing a fall from June’s revised figure of 455,000, but still trumping the general predicted figure of 185,000 on Briefing.com.
Optimism surges for a soft-landing scenario for the world’s largest economy, wherein inflation could decline without hurling it into a considerable recession. Encouraging statistics like these robust jobs numbers are painting a hopeful picture.
“The economy is doing better than expected, and a healthy labor market continues to support household spending,” commented Nela Richardson, the chief economist for ADP. Leisure and hospitality emerged as a pivotal area catalysing this new job creation, as data from ADP revealed, while manufacturing displayed signs of frailty.
The report noted that pay growth continued its ‘downward trend in July’. Workers who transitioned into new jobs observed a gain of 10.2%, a dip when compared to June’s 11.2%. The employees who continued at their existing jobs encountered a raise of 6.2% in the previous month — the weakest pace since November 2021.
This overall downward trend, if sustained, could bring welcome news to officials striving to ascertain that a surging labour market and wage growth does not inflate the persistent cost-of-living pressures for consumers. Notably, the next significant data point centres on the employment figures, set for a Friday release by the Labor Department.
However, Ian Shepherdson, an economist at Pantheon Macroeconomics, mentioned that ADP might not be a consistent indicator of the official estimates. He suggested, “We expect job growth to slow over the next few months,” aligning with a decline in a hiring intentions measure.
In related news, industrialization and agricultural facilitation are central to government poverty reduction programmes, says Presidential Adviser on Poverty Alleviation Lorenzo ‘Larry’ Gadon. The administration’s economic recovery initiatives focus on creating high-quality jobs. To read more click HERE.
