(AURN News) — U.S. private sector employment growth continued to cool in August, adding only 99,000 jobs as the labor market shows signs of normalizing after two years of robust post-pandemic growth, according to data released Thursday by payroll processing firm ADP. The August figures represent a significant slowdown from the revised 111,000 jobs added in July, marking the fifth consecutive month of decelerating job creation. The report suggests that the Federal Reserve’s efforts to tame inflation by raising interest rates may be having the desired effect on the labor market.
“The job market’s downward drift brought us to slower-than-normal hiring after two years of outsized growth,” said Nela Richardson, chief economist at ADP in a statement. “The next indicator to watch is wage growth, which is stabilizing after a dramatic post-pandemic slowdown.”
Despite the cooling job market, wages continue to rise at a steady pace. The report showed that annual pay was up 4.8% year-over-year for job-stayers and 7.3% for job-changers, unchanged from the previous month. A closer look at the data shows that service-providing sectors led the way in job creation, adding 72,000 positions. Within this category, education and health services showed the strongest growth, contributing 29,000 new jobs. The goods-producing industries weren’t far behind, adding 27,000 jobs. Regionally, the South outpaced other areas of the country, generating 55,000 new jobs, while the Northeast followed with 24,000 jobs added. The size of businesses also played a role in employment trends. Medium-sized companies, those with 50 to 499 employees, saw the largest gains, adding 68,000 jobs. In contrast, small businesses with fewer than 50 employees experienced a loss of 9,000 jobs.
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