Private payrolls grew by just 132,000 in August

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On August 5, 2022 in Manhattan, New York City, a hiring sign can be seen in a cafe as the United States Department of Labor released its July employment report.

Andrew Kelly | Reuters

According to payroll processing firm ADP, companies sharply slowed the pace of hiring in August amid growing fears of an economic slowdown.

Private payrolls grew just 132,000 for the month, a slowdown from July’s 270,000 gains, the company said in its monthly salary report.

The Dow Jones estimate for the ADP count was 300,000.

“Our data suggests a shift toward a more conservative pace of hiring, possibly as companies try to decipher the economy’s conflicting signals,” said ADP chief economist Nela Richardson. “We could be at a turning point, from supercharged track gains to something more normal.”

Payroll numbers in August are notoriously volatile. The release of ADP also comes at an uncertain time for a US economy that experienced negative growth in the first half of 2022 amid the highest inflation the country has seen since the early 1980s. The Bureau of Labor Statistics’ more closely watched report on nonfarm payrolls comes out Friday and is expected to show an increase of 318,000.

The report had been on a public hiatus until late summer when the company tweaked its methodology and partnered with the Stanford Digital Economy Lab.

While many of the changes are technical in nature, ADP’s number differs in the way it takes into account things like weather and natural disasters. The company also differs from the BLS in that ADP’s count includes all employees who are active in the company, while the BLS measures only those who were paid that month.

In addition to changes in how the job total is counted, ADP now provides wage information. The August numbers add to inflation concerns as the company reported an annual wage increase of 7.6% for the month.

From a sector perspective, the service-related industries accounted for the most jobs, with 110,000 additional jobs. Leisure and hospitality grew by 96,000 and saw pay increases of 12.1%. Trade, transportation and utilities contributed 54,000.

However, there were declines in a number of sectors. These include financial activities (-20,000), education and health services (-15,000) and professional and business services (-14,000).

On the goods producing side, construction added 21,000 and natural resources and mining saw a gain of 2,000. Production was flat.

From a company size perspective, companies with 500 or more employees grew by 54,000. Mid-sized companies gained 53,000, while companies with fewer than 50 employees saw a gain of 25,000.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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