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WASHINGTON D.C.: In July, US private payrolls rose more than expected, boosted by small businesses increasing their hiring and reflecting the ongoing resilience of the labor market, which could protect the economy from a recession.
The ADP payroll service’s National Employment report, released this week, also showed a moderation in wage growth, which could have a positive effect on inflation.
“This is the latest in ‘soft-landing’ economic statistics, where Fed officials are seeing inflation slowing down without creating the massive unemployment seen in a recession,” said Christopher Rupkey, chief economist at FWDBONDS in New York, as quoted by Reuters.
“As long as inflation remains on the low side in upcoming reports, the Fed is likely to skip the September meeting when it comes to hiking rates again,” he added.
The ADP report said that in July, private payrolls increased by 324,000 jobs, after surging by 455,000 in June, while economists polled by Reuters had forecast private employment would increase by 189,000.
Hiring at small businesses, establishments with one to 49 employees, increased 237,000, accounting for more than two-thirds of private payroll gains in July.
Payrolls at medium-sized businesses, with 50 to 499 workers rose by 138,000, but large establishments, businesses with more than a headcount of 500, cut 67,000 workers.
“The hiring challenge for small firms has been part of their growth story, they were blocked out last year by bigger firms that hired in droves,” noted Nela Richardson, ADP chief economist, as reported by Reuters.
The ADP report, jointly developed with the Stanford Digital Economy Lab, was published ahead of the release last week of the US Bureau of Labor Statistics’ more comprehensive and closely watched employment report for July.
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