A “help wanted” sign is displayed in a Manhattan store window on December 2, 2022 in New York City.
Spencer Platt | Getty Images
According to ADP, job creation in the United States slowed more than expected in August, a sign that the surprisingly resilient US economy may be starting to ease under pressure from higher interest rates.
The company reported Wednesday that private employers added 177,000 jobs in August, well below the revised total of 371,000 in July. Economists consulted by Dow Jones expected 200,000 jobs to be added in August.
ADP also reported that wage growth slowed for workers who changed jobs and for those who remained in their current positions.
“This month’s numbers are consistent with the pace of job creation before the pandemic,” Nela Richardson, chief economist at ADP, said in a press release. “After two years of exceptional gains associated with the recovery, we are moving toward more sustainable wage and employment growth as the economic impact of the pandemic recedes.”
The weaker-than-expected report comes as investors and economists are divided over whether inflation in the United States can continue to fall to 2% without a significant slowdown in the economy. The strength of the labor market has been one of the main reasons the economy has grown faster than many expected in 2023.
The Federal Reserve raised interest rates to a 22-year high in July and Fed Chairman Jerome Powell signaled last week that the central bank was willing to raise rates further this year.
The ADP report is traditionally seen as a signal of what the Department of Labor’s monthly jobs report will show. However, the company changed its methodology last year, making its predictive trends less clear.
The Ministry of Labor’s jobs report will be released on Friday.