US private sector employment rises by just 167kOn August 5, 2020 by Thomas Belayneh
According to the latest data from ADP, one of the US’ largest private payrolls processors, private sector employment increased by a meagre 167,000 in July. Consensus expectations were for a much larger 1.5m in jobs growth, so today’s data will undoubtedly cause concern to investors and policymakers that the labour market recovery has stalled.
The pace of jobs growth was a just fraction of the prior month with June’s report showing an increase of 2,369,000 (although it was adjusted higher to 4,314,000 in July’s report). The weakness in private payrolls data is consistent with the weakness observed in the jobless claims data last week, as government data showed initial jobless claims remained above 1m and continuing jobless claims rose to 17,018,000.
In terms of company size, the declines were broad-based with no particular size as the root cause for the fall, however, 25,000 jobs were lost at medium-sized businesses (those with 50 to 499 employees) while there were gains of 63k and 129k jobs at small and large-sized businesses, respectively. These figures compare with rises of 937k, 559k and 873k for small, medium and large-sized businesses, respectively, in the prior month period.
In terms of sectors, the decline is far more lop-sided, with services private payrolls growth falling from 1,912,000 to 166,000 in July. Leisure and hospitality accounted for the bulk of this fall, falling from a 961k rise in June to just 38k in July.
Payrolls growth in goods-producing sectors fell from 457k to just 1k in July, as job losses of 1k and 8k were reported in natural resources and construction. The falls were offset, however, by a rise of 10,000 in manufacturing payrolls, however.
This site uses Akismet to reduce spam. Learn how your comment data is processed.