Source: AFP
U.S. private sector hiring fell in April, but job growth was still higher than expected, boosted by the services sector, payrolls firm ADP said on Wednesday.
Companies added 192,000 jobs last month, down slightly from a revised 208,000 the previous month, the report said.
The labor market has shown resilience despite the US central bank’s efforts to keep interest rates high and fight persistent inflation.
While higher interest rates raise borrowing costs for consumers and businesses — and may weigh on employment — the labor market has held up with employers reluctant to let go of workers they initially struggled to find.
The strength of the labor market in turn helped support consumer spending.
“Hiring was broad-based in April,” said ADP chief economist Nela Richardson.
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He added that only the information sector, such as telecommunications and media, showed weakness.
In particular, the leisure and hospitality sector added 56,000 jobs, while the construction sector added 35,000 jobs.
Wage growth “continues to decelerate,” ADP said, although the average pace of hiring has accelerated over the past three months.
This will provide some relief to policymakers and allay concerns that high wages could increase inflation.
Wage gains for those who remained in their jobs were little changed at 5%, while gains for those who changed jobs fell from 10.1% to 9.3%.
Other sectors that added jobs included trade, transportation and utilities, as well as education and health services, ADP said.
However, analysts warn that the private payroll numbers could be significantly revised.
“The labor market is likely to ease going forward due to the effects of tight monetary policy,” said economist Rubeela Farooqi of High Frequency Economics.
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“But we expect employment growth to remain positive and we expect the unemployment rate to remain low, supporting economic activity this year,” he added.
Later on Wednesday, the Federal Reserve is set to announce whether it will make changes to interest rates.
The central bank is expected to keep interest rates steady with inflation remaining above policymakers’ longer-term target of 2 percent.
Source: AFP