Evelyn Reynolds
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Private payroll growth slowed to 122,000 in July, less than expected, ADP says
Private payrolls increased by just 122,000 in July, the slowest pace since January and below the upwardly revised 155,000 in June and the estimate for 150,000, ADP reported.
Wages for those who stayed in their jobs increased 4.8% from a year ago, the smallest increase since July 2021.A “Now Hiring” sign is seen at a FedEx location on Broadway on June 07, 2024 in New York City.
Michael M. Santiago | Getty ImagesPrivate job growth slowed further in July while the pace of wage gains hit a three-year low, payrolls processing firm ADP reported Wednesday.
Companies added just 122,000 jobs on the month, the slowest pace since January and below the upwardly revised 155,000 in June. Economists surveyed by Dow Jones had been looking for a gain of 150,000.ADP also reported that wages for those who stayed in their jobs increased 4.8% from a year ago, the smallest increase since July 2021 and down 0.1 percentage point from June.
“With wage growth abating, the labor market is playing along with the Federal Reserve’s effort to slow inflation,” said ADP chief economist Nela Richardson. “If inflation goes back up, it won’t be because of labor.”
Futures tied to major stock indexes added to gains following the report while Treasury yields fell.
There was more positive inflation news Wednesday, as the Labor Department’s Bureau of Labor Services reported that the employment cost index, an indicator Fed officials watch closely, increased just 0.9% in the second quarter, according to seasonally adjusted figures.
That was below the 1.2% acceleration in the first quarter and the Dow Jones estimate for a 1% increase.Both reports could add to the likelihood that the Fed will signal a September rate cut when it concludes its two-day meeting later in the day.
Job growth was heavily concentrated in two sectors — trade, transportation and utilities, which added 61,000 workers, and construction, which contributed 39,000. Other sectors seeing gains included leisure and hospitality (24,000), education and health services (22,000) and other services (19,000).
Several sectors reported net losses on the month. They included professional and business services (-37,000), information (-18,000) and manufacturing (-4,000). Companies that employ fewer than 50 people also registered a loss, down 7,000 in June.
Geographically, the job gains were concentrated in the South, which saw a gain of 55,000, while the Midwest added just 17,000..
The ADP report comes two days before the Labor Department’s Bureau of Labor Services releases its nonfarm payrolls count, which, unlike the ADP tally, includes government jobs. The two reports can differ substantially, with ADP overshooting the BLS estimate of 136,000 for private payrolls in June.
Economists expect job growth of 185,000 in July, down from 206,000 in June, with the unemployment rate holding steady at 4.1%. More - in Economy
Euro zone inflation rises to 2.6% in July, above expectations
Headline inflation in the euro zone unexpectedly rose to 2.6% in July, the European Union’s statistics agency said Wednesday.
Core inflation, which excludes more volatile energy, food, alcohol and tobacco prices, hit 2.9% in July, which was higher than expected.
The widely watched services inflation print came in at 4% for July, easing slightly from the 4.1% reading of June.People shopping at the downtown market, Cour Lafayette, in Toulon, on July 27, 2024.
Magali Cohen / Hans Lucas | Afp | Getty ImagesHeadline inflation in the euro zone unexpectedly rose to 2.6% in July, the European Union’s statistics agency said Wednesday, even as price growth in the services sector eased slightly.
In June, inflation had come in at 2.5%, easing slightly from the 2.6% of May. Economists polled by Reuters had been expecting the headline figure for July to be unchanged from June’s reading at 2.5%.Core inflation, which excludes more volatile energy, food, alcohol and tobacco prices, hit 2.9% in July, versus a Reuters estimate of 2.8%. The figure compared with a core print of 2.9% in June.
The widely watched services inflation print came in at 4% for July, down from the 4.1% of June.
Harmonized inflation inched higher in several key euro zone countries, including in leading economies Germany and France. In both countries, inflation had been at 2.5% in June and picked up to 2.6% in July.
The inflation rates come just a day after the release of the zone’s second quarter gross domestic product, which the European Union’s statistics office said grew 0.3% in the three months to the end of June.
This was above the 0.2% growth that economists polled by Reuters had expected, and came even as the euro zone’s largest economy Germany reported a 0.1% contraction.Investors will now weigh how the fresh data will impact the European Central Bank’s trajectory for potential future interest rate cuts. The ECB held rates steady when it met earlier this month after reducing them in June. At the time, it left open the option for another cut in September.
The ECB Governing Council said it would continue to consider the dynamics and outlook of inflation, as well as the strength of monetary policy transmission in its decision-making. It stressed that was “not pre-committing to a particular rate path.”
Julien Lafargue, chief market strategist at Barclays Private Bank, on Wednesday said that the latest inflation figures are unlikely significantly impact the outlook for interest rates.
“While the hotter-than-expected headline inflation could be seen as a setback for the ECB, we don’t think it necessarily changes the narrative. Indeed, economic growth remains subdued — including the Q2 GDP print — which should help inflation remain on a downtrend,” he said.
The ECB could therefore still cut interest rates in September, Lafargue noted. More - in Economy
What to Watch as the Fed Meets on Wednesday
The Federal Reserve is expected to leave interest rates unchanged but could set up for a cut later this year.Federal Reserve officials are widely expected to leave their key interest rate unchanged on Wednesday, keeping it at the two-decade high of 5.3 percent for a 12th straight month in a bid to slow economic growth and crush inflation.But investors will be most focused on what comes next for borrowing costs. Economists and traders widely expect Fed officials to cut their policy rate at their next meeting, in September. Wall Street will closely watch for any hints about the future in both the Fed’s statement at 2 p.m. and a subsequent news conference with Jerome H. Powell, the chair of the central bank.While few economists expect an explicit signal on when a rate reduction is coming — the Fed has been trying to keep its options open — many think that central bankers will at least leave the door open to a cut at the next meeting, which will wrap up on Sept. 18. And Mr. Powell is sure to face questions about how officials are thinking about the potential for moves after that. Here’s what to look out for.Watch the Fed’s statement for changes.The Fed’s statement, a slowly changing document that officials release after each two-day meeting, currently states that Fed policymakers expect to hold rates steady until they have “gained greater confidence that inflation is moving sustainably” down.Michael Feroli, chief U.S. economist at J.P. Morgan, wrote in his preview note that the statement could be headed for a small but meaningful tweak: Officials could adjust “greater confidence” to read “further confidence,” or some similar rewording. That would signal that policymakers were becoming more comfortable with the inflation backdrop.There would be a reason for that growing confidence. After proving surprisingly stubborn early in 2024, inflation is cooling again. The latest report showed that the Fed’s preferred index picked up just 2.5 percent over the year through June — still quicker than the central bank’s 2 percent target, but much slower than that measure’s recent peak in 2022, which was above 7 percent.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
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Amazon Union Dissident Wins Election as President
The Amazon Labor Union has been divided over strategy and governance issues after winning a representation vote at a Staten Island warehouse in 2022.A dissident group has won control of the Amazon Labor Union, the only union in the country that formally represents Amazon warehouse workers, election results on Tuesday showed.The union won a representation vote at a Staten Island warehouse in 2022 but has yet to negotiate a contract as Amazon contests the outcome. The group has been divided over governance and strategy, as well as personality conflicts, after falling short in efforts to organize other Amazon facilities.A leader of the dissident group, Connor Spence, will take over, succeeding the founding president, Christian Smalls, who chose not to run for re-election. Mr. Spence defeated the union’s current recording secretary and a third candidate in an election that attracted roughly 250 votes, out of thousands of workers at the warehouse.The result was announced by Mr. Spence’s group and confirmed by Mr. Smalls.Mr. Spence’s group brought a lawsuit last year to force leadership elections within the union. The two sides announced a settlement in January that set the stage for this month’s election, which was overseen by a court-approved monitor.The dissident group, the A.L.U. Democratic Reform Caucus, argued that Mr. Smalls and other union leaders had too much power and were unaccountable to rank-and-file members, a charge that Mr. Smalls rejected.The caucus also claimed victory for the union’s three other officer positions. It said in a statement that after a long fight to reform the union, “we are relieved to finally be able to turn our full attention toward bringing Amazon to the table.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
- in Economy
Movie Editors and Animators Fear A.I. Will Kill Jobs
Actors and writers won strict limits on artificial intelligence in last year’s contract negotiations, but editors and artists face a growing challenge.For most of his four-plus decades in Hollywood, Thomas R. Moore has worked as a picture editor on network television shows.During a typical year, his work followed a pattern: He would spend about a week and a half distilling hours of footage into the first cut of an episode, then two to three weeks incorporating feedback from the director, producers and the network. When the episode was done, he would receive another episode’s worth of footage, and so on, until he and two other editors worked through the TV season.This model, which typically pays picture editors $125,000 to $200,000 a year, has mostly survived the shorter seasons of the streaming era, because editors can work on more than one show in a year. But with the advent of artificial intelligence, Mr. Moore fears that the job will soon be hollowed out.“If A.I. could put together a credible version of the show for a first cut, it could eliminate one-third of our workdays,” he said, citing technology like the video-making software Sora as evidence that the shift is imminent. “We’ll become electronic gig workers.”Mr. Moore is not alone. In a dozen interviews with editors and other Hollywood craftspeople, almost all worried that A.I. had either begun displacing them or could soon do so.As it happens, these workers belong to a labor union, the International Alliance of Theatrical Stage Employees (IATSE), which can negotiate A.I. protections on their behalf, as actors’ and writers’ unions did during last year’s strikes. Yet their union recently approved a contract, by a large margin, that clears the way for studios to require employees to use the technology, just as Mr. Moore and his colleagues have feared.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
- in Economy
Euro zone’s economy grew 0.3% in second quarter, above expectations despite German contraction
The euro zone’s economy grew by 0.3% in the second quarter of 2024, flash figures from the European Union’s statistics office showed Tuesday.
Economists polled by Reuters had expected a 0.2% increase on a quarterly basis.
Germany, the euro zone’s biggest economy, unexpectedly posted a 0.1% contraction in the second quarter.The lights of Frankfurt am Main’s banking skyline glow in the last light of day.
Boris Roessler | Picture Alliance | Getty ImagesThe euro zone’s economy grew by more than expected in the second quarter of 2024, flash figures from the European Union’s statistics office showed Tuesday.
The zone’s gross domestic product rose by 0.3% in the three months to the end of June compared to the previous quarter, the data showed. Economists polled by Reuters had expected a 0.2% increase on a quarterly basis.First-quarter GDP was confirmed at 0.3%, unchanged from the initial reading announced earlier this year.
The euro zone entered a technical recession in the second half of 2023, as GDP contracted in both the third and fourth quarter of the year, according to revised figures released earlier this year.
Bert Colijn, senior euro zone economist at ING, said in a note on Tuesday that the data indicated that the regiona’s economy is somewhat recovering.
“After stagnation for all of 2023, this is a relief and shows that the economy has started to cautiously recover,” he said, adding that the economy was now in a better situation than a year prior.
“The question remains where the economy will head from here and recent data do not provide much confidence that the eurozone economy is further accelerating,” Colijn said.Data released earlier in the day showed that the euro zone’s largest economy Germany unexpectedly shrank by 0.1% in the second quarter — coming in below the expectations of analysts polled by Reuters, who had anticipated the country’s GDP to grow by 0.1%.
Germany was one of just four countries whose GDP fell in the three months to the end of June, according to the European Union’s statistics office. Latvia, Sweden and Hungary were the other three countries that posted contractions.
Klaus Wohlrabe, head of surveys at ifo, said in a Wednesday note that the German economy was “stuck in crisis” and that it was also not expected to improve much in the third quarter.
Ireland meanwhile recorded the biggest growth at 1.2% in the second quarter, while the euro zone’s second-largest economy, France, logged GDP growth of 0.3% over the same period, its statistics office said Tuesday.
Inflation figures for the euro zone are set to be released on Wednesday. The fresh euro zone data out this week comes after the European Central Bank left interest rates unchanged at its meeting earlier this month, saying that the option for a cut in September was “wide open.” More - in Economy
Is the Labor Market About to Crack? It’s the Key Question for the Fed.
Central bankers are paying more attention to the strength of the job market as inflation cools. But it’s a tough time to gauge its resilience.David Gurley Jr.’s bank account benefited from a hot pandemic labor market. Mr. Gurley, a video game programmer, switched jobs twice in quick succession, boosting his salary and nabbing a fully remote position.By late last year, he was worried that a pullback in the tech industry could make his job precarious. But when it comes to the outlook now, “it seems like things are more or less OK,” Mr. Gurley, 35, said. Opportunities for rapid wage gains are not as widespread and some layoffs have happened, but he feels he could find a job if he needed one.Mr. Gurley’s experience — a rip-roaring labor market, then a wobbly one and now some semblance of normality — is the kind of postpandemic roller-coaster ride that many Americans have encountered. After breakneck hiring and wage growth in 2022 and 2023, conditions have moderated. Now economic officials are trying to figure out whether the labor market is settling into a new holding pattern or is poised to take a turn for the worse.The answer will be pivotal for the future of Federal Reserve policy.Central bankers spent 2022 and 2023 focused mainly on wrestling rapid inflation under control. They have left interest rates unchanged at 5.3 percent for more than a year now and are likely to keep them there at their meeting this week, making money expensive to borrow in a bid to restrain consumer demand and weigh down the overall economy.But now that inflation is returning to normal, officials are again concentrating keenly on their second major goal: maintaining a strong job market. They are trying to strike a careful balance in which they fully stamp out inflation without causing unemployment to spike in the process.The labor market still looks solid. Joblessness is low by historical standards, and claims for unemployment insurance have stabilized after moving up earlier this year. A fresh jobs report set for release Friday is expected to show that employers continued to hire in July, albeit at a slower pace.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More
