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Private Sector Rebounds with Surprise Job Growth in July
30 Jul
Summary
- Private employers added 104,000 jobs in July, exceeding expectations
- Wages for job changes increased 7% over the prior year, while pay growth for existing workers slowed
- Federal Reserve faces pressure to cut interest rates amid mixed labor market data
The U.S. labor market showed signs of resilience in July 2023, as private employers added more jobs than expected. According to data from ADP, private payrolls grew by 104,000 in July, exceeding the 75,000 forecast by economists and reversing the 23,000 job cuts seen in June.
The report also revealed that wages for job changes increased 7% over the prior year in July, unchanged from the previous month. However, pay growth for workers who remained in the same job slowed to 4.4% in July, down from 4.5% in June.
These mixed labor market signals come as the Federal Reserve prepares to release its next monetary policy statement. At least one Federal Open Market Committee (FOMC) member, Fed Governor Christopher Waller, has argued that the central bank should cut interest rates at its July meeting, citing concerns about the downside risks to the labor market.
Other recent data has shown some signs of slowing, with the number of job openings decreasing and the hiring rate ticking lower in June. Investors will be closely watching the upcoming July jobs report, which is expected to show 101,000 nonfarm payroll jobs were added to the U.S. economy, with the unemployment rate inching higher to 4.2%.
