- Private sector job gains in July totaled 324,000, driven by a 201,000 jump in hotels, restaurants, bars and affiliated businesses, payroll processing firm ADP reported.
- That total was well above the Dow Jones estimate for 175,000, though it marked a decrease from the downwardly revised 455,000 in June.
- The services sector was responsible for 303,000 jobs on the month.
Private sector companies added far more jobs than expected in July, pushed higher by a boom in leisure and hospitality jobs, payroll processing firm ADP reported Wednesday.
Job gains for the month came to 324,000, driven by a 201,000 jump in hotels, restaurants, bars and affiliated businesses. That total was well above the Dow Jones consensus estimate for 175,000, though it marked a decrease from the downwardly revised 455,000 in June.
The report provides another indication that the U.S. jobs market has retained its strength despite an extended Federal Reserve campaign to slow the economy and bring down inflation.
“The economy is doing better than expected and a healthy labor market continues to support household spending,” said Nela Richardson, ADP’s chief economist. “We continue to see a slowdown in pay growth without broad-based job loss.”
Services-related industries dominated job creation during the month as the economy continues its transition back from being goods-oriented in the early days of the Covid pandemic. The sector was responsible for 303,000 jobs on the month.
Along with the big move in leisure and hospitality, information services added 36,000 positions; trade, transportation and utilities grew by 30,000; and the other services category, which encompasses things such as dry cleaning, housekeeping and the like, contributed 24,000.
Goods producers added just 21,000, as natural resources and mining increased by 48,000 but manufacturing lost 36,000. Construction was responsible for the other 9,000.
ADP also noted that wages increased by 6.2% from a year ago, well above the long-term pace but the lowest growth since November 2021.
The ADP report serves as a precursor for Friday’s more widely followed nonfarm payrolls count from the Labor Department’s Bureau of Labor Statistics. The numbers can differ widely, as they did in June when ADP’s 455,000 total was well above the 209,000 from the BLS.
Through the first six months of the year, ADP had averaged 256,000 a month while the BLS was at 278,000. The Dow Jones estimate for the official July government report is 200,000.
Also of note from the ADP report was that the job gains were concentrated in firms with fewer than 50 employees, which were responsible for 237,000 positions. Companies with between 50 and 499 employees added 138,000, while big firms lost 67,000.
Source: Economy - cnbc.com
