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US hiring surges in July: ADP survey
[WASHINGTON] US private firms hired at a torrid pace in July, far faster than economists expected, payrolls firm ADP said Wednesday, which could point to another dip in the unemployment rate.
ADP's monthly survey showed nearly every industry had gains, and the US tariffs battle with key trading partners has yet to have a major impact on jobs.
Coming on the day the Federal Reserve is due to announce its latest interest rate decision, the survey shows the American labor market remains strong, which could be a signal that wages will accelerate as well, fanning inflation.
The Fed is not expected to raise the benchmark lending rate again until September, but will watch wages and inflation closely to determine if it should be more aggressive about letting steam out of the economy. The central bank is expected to hike twice more this year.
ADP said the private sector added 219,000 new jobs, the most since February and surpassing the 175,000 consensus forecast among economists.
"The labor market is on a roll with no signs of a slowdown in sight," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. "Nearly every industry posted strong gains and small business hiring picked up."
The dominant US services sector led the way, adding 177,000 new jobs, with health care and leisure/hospitality accounting for the bulk of the gains.
The goods producing sector hired 42,000 in the month, including 23,000 in manufacturing.
The ADP report is closely scrutinized as it comes ahead of Friday's all-important government jobs report, although the two reports are not always in line.
With the unemployment rate at four percent and wages starting to rise at long last, the Fed will be on alert for signs inflation going beyond the two percent target.
Mark Zandi, chief economist of Moody's Analytics, said, "The job market is booming, impacted by the deficit-financed tax cuts and increases in government spending."
And while many firms have reported concerns about the ongoing trade confrontations, and some have cut jobs, Zandi said that is not showing up in the data.
"Tariffs have yet to materially impact jobs, but the multinational companies shed jobs last month, signaling the threat."