Private sector employment grew by 122,000 jobs in July, while annual pay increased 4.8% year-over-year, payroll giant ADP
The service-providing sector gained 85,000 jobs, but within that category the professional and business services sector lost 37,000 jobs, and the information sector lost 18,000. On the other hand, the trade, transportation and utilities sector gained 61,000 jobs, leisure and hospitality 24,000 jobs, education and health services 22,000, and financial activities gained 14,000 jobs. But even in leisure and hospitality there appeared to be a slowdown.
The goods-producing sector added 37,000 jobs, including 39,000 in construction, offset by a loss of 4,000 in manufacturing.
"This is evidence of the continued narrative of a slowdown, for sure, even if you took in some weather effects and you caveat it for that, it's clear that the labor market is slowing steadily," said ADP chief economist Nela Richardson during a conference call with reporters Wednesday, noting there might have been some impact from the recent hurricane in Houston. "Now, when we talk about a cooldown, we often reference the cooldown without referencing the context in which this cooldown is taking place. We've seen really strong, solid job gains and a remarkable job to market, and it is a normalization that we've seen in the data, back toward a normal means gain."
Small businesses lost 7,000 jobs in July, with a gain of 15,000 jobs among small businesses with between one and 19 employees offset by a loss of 22,000 in businesses with between 20 and 49 employees. Medium-sized establishments added 70,000 jobs during the month, including 55,00 in businesses with between 50 and 249 employees and 15,000 in companies with between 250 and 499 employees. Large businesses with 500 employees or more added 62,000 jobs.
Year-over-year pay gains for people who stayed at their jobs slowed to 4.8% in July, which was the slowest pace of growth in three years. Job-changers saw a big drop, with pay gains slowing to 7.2% from 7.7 %. In professional and business services, the median change in annual pay for job stayers was 4.7%.
"If inflation picks up, and no one thinks that's likely right now, it won't be because of labor," said Richardson. "We're seeing continued, steady decline in wage growth that fits with the overall inflation picture also cooling along with the labor market."
