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US private sector job growth higher than expected: ADP

By AFP

May 1, 2024 07:28 PM


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Hiring in the US private sector cooled in April but job growth was still higher than anticipated, boosted by the services sector, payroll firm ADP said Wednesday.

Companies added 192,000 jobs last month, down slightly from a revised 208,000 in the month before, the report said.

The labor market has shown resilience despite the US central bank's efforts to keep interest rates elevated and fight stubborn inflation.

While higher rates raise the borrowing costs for consumers and businesses -- and can weigh on employment -- the jobs market has held up with employers reluctant to let go of workers they initially struggled to find.

The strength of the job market has in turn helped to support consumer spending.

"Hiring was broad-based in April," said ADP chief economist Nela Richardson.

She added that only the information sector, such as telecommunications and media, showed weakness.

In particular, the leisure and hospitality sector added a solid 56,000 jobs while the construction sector added 35,000 roles.

Wage growth "continues to slow," ADP said, though the average hiring pace has accelerated in the last three months.

This should provide some relief to policymakers and assuage concerns that high wages could add to inflation.

Pay gains for those who remained in their jobs were little changed at five percent, while gains for those who switched jobs slipped from 10.1 percent to 9.3 percent.

Other sectors adding jobs included trade, transport, and utilities, as well as education and health services, said ADP.

But analysts caution that private payroll numbers can be revised significantly.

"The labor market is likely to loosen going forward on the effects of restrictive monetary policy," said economist Rubeela Farooqi of High-Frequency Economics.

"But we expect job growth to remain positive and expect the unemployment rate to remain low, supportive of economic activity this year," she added.

Later Wednesday, the Federal Reserve is set to announce if it will make changes to interest rates.

The central bank is expected to keep rates steady with inflation still above policymakers' longer-term two percent target.


AFP


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