Washington: U.S. employers tapered hiring in August, slowing for the second straight month, according to Wednesday data from payroll firm ADP.Private employment increased by 132,000 this month, the ADP said in a newly revised survey. said it was less than half the pace in July when companies employed nearly 270,000 workers. Released ahead of Friday’s all-important government jobs report, the data have pushed interest rates aggressively to keep down ferocious inflation amid fears a strong labor market will trigger a wage spiral. That could be good news for the Federal Reserve.
ADP chief economist Nella Richardson said: “The data suggests the pace of hiring is shifting in a more conservative direction as firms may be trying to decipher conflicting signals in the economy. there are,” he said. “We may be at an inflection point from overkill to more ordinary jobs.” continued, with an increase of 21,000 in August, but the manufacturing sector showed no gains.
Leisure and hospitality performed particularly well, jumping 96,000 over the month. This is “a sign that people want to return to a more normal life,” she told reporters. The ADP added wage information to her monthly report, showing that wages increased her 7.6% over the past 12 months. However, wage increases for workers who switched jobs were a staggering 16.1%, the report said.
But Richardson said wage growth at these high levels was “steady”, unlike last year when wages were rising. US consumers were very happy with the economic conditions in August, as fears of higher prices eased, according to a closely watched survey released on Tuesday.
The Consumer Confidence Index rose nearly eight points to 103.2 in August from 95.3 in July after three months of decline, according to the Conference Board. The result far exceeded the modest recovery economists had expected as sentiment improved over the current state of the economy and the outlook six months ahead. Americans are at their highest level of holiday planning this year after contracting last month, indicating they are more willing to spend, according to Lynn Franco, senior director of economic indicators at The Conference Board.
The survey also found that plans to purchase homes, cars and appliances are on the rise. Consumer savings and government subsidies were the main drivers of the world’s largest economic recovery after the pandemic-driven recession. But Franco warned that “inflation concerns continue to recede, but remain elevated.” “Inflation and further interest rate hikes still pose risks to economic growth in the near term, although improved confidence could support spending,” Franco said in a statement.
With inflation at its highest level in 40 years, the Federal Reserve (Fed) is aggressively campaigning to keep prices down by sharply increasing interest rates. Fed Chairman Jerome Powell also dashed hopes that the Fed would ease or turn around anytime soon in a speech Friday, saying the process would entail some “pain” for American families.
The Current Status Index rose for the first time since March, while the Expectations Index rose nearly 10 points to 75.1. The survey also shows a bit less optimism about the labor market, with fewer respondents rating jobs as ‘abundant’.
High Frequency Economics’ Rubeela Farooqi calls the improvement “positive progress.” “However, in terms of consumer spending, momentum is likely to slow as the Fed continues to raise rates over the next few months,” she said in her analysis. -FP
