US private sector job gains slow more than expected in January
PRIVATE sector hiring in the United States fell more than anticipated in January, according to data on Wednesday (Jan 31) from payroll firm ADP, following efforts to cool the world’s biggest economy and tame inflation.
The United States added 107,000 jobs in the private sector this month, ADP said, slowing from a revised 158,000 in December.
Most of the job gains were in service-providing sectors including leisure and hospitality and trade, transport and utilities.
But other service industries such as information lost positions.
“Progress on inflation has brightened the economic picture despite a slowdown in hiring and pay,” said Nela Richardson, ADP chief economist, in a statement.
A resilient labour market has helped to support consumers and, in turn, spending, even as households drew down on their pandemic-era savings and as higher interest rates raised borrowing costs.
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The Federal Reserve lifted interest rates rapidly in recent years, aiming to quell a surge in inflation by easing demand.
But as higher interest rates bite and inflation comes down, analysts expect growth to slow this year.
The central bank is mulling the best time for its first rate cut, with the policy decision from its latest meeting due later on Wednesday.
For now, Richardson said: “Wages adjusted for inflation have improved over the past six months, and the economy looks like it’s headed toward a soft landing in the US and globally.”
In January, pay gains for those who stayed in their jobs, compared with a year prior, crept down to 5.2 per cent.
Workers who changed jobs also saw the smallest annual pay bump since May 2021, at 7.2 per cent, said ADP. AFP
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