WASHINGTON: US private employers hired fewer workers than expected for a second straight month in August, suggesting that the labour market recovery was slowing as the Covid-19 pandemic persists and government money to support workers and employers dries up.
Large businesses accounted for the bulk of the job gains shown in the ADP National Employment Report on Wednesday, with small enterprises posting a modest increase. A $600 weekly unemployment supplement expired on July 31, while a program that gave businesses loans that can be partially forgiven if used for employee pay has also lapsed.
Private payrolls increased by 428,000 jobs last month. Data for July was revised higher to show hiring up by 212,000 jobs instead of the initially reported 167,000. The revision still left the July tally out of alignment with the 1.462 million rise in private employment reported by the government last month.
Economists polled by Reuters had forecast private payrolls would increase by 950,000 in August.
The ADP report, jointly developed with Moody's Analytics, has fallen short of the government payrolls count since May because of methodology differences. The ADP report is based on active and paid employees on company payrolls.
The Labour Department's Bureau of Labour Statistics (BLS) counts workers as employed if they received a paycheck during the week that includes the 12th of the month.
According to a Reuters survey of economists, private payrolls probably increased by 1.250 million jobs in August after rising 1.462 million in July. Such a gain would result in nonfarm payrolls advancing by 1.4 million jobs last month after increasing 1.763 million. That would leave nonfarm payrolls about 11.5 million below their pre-pandemic level.
UNCERTAIN OUTLOOK
The moderation in job growth suggested by the ADP report is in line with other labor market indicators. Weekly new applications for unemployment benefits are hovering around 1 million. Data from Kronos, a workforce management software company, showed seasonally adjusted shift growth continued to stagnate in August, while figures from Homebase, a payroll scheduling and tracking company, showed little change in employment last month from July.
"In order for the economy to begin to add the number of jobs that continue to be predicted each month, we must first see a significant and sustained increase in overall shift volume growth," said Dave Gilbertson, vice president, strategy and operations at Kronos.
United Airlines said on Wednesday it was preparing to furlough 16,370 workers on Oct. 1. Airlines received $25 billion in government stimulus funds in March to pay wages and protect jobs through September.
Large businesses accounted for 298,000 new jobs last month, while small business payrolls increased 52,000. Medium-sized companies added 79,000 jobs.
Manufacturers hired 9,000 workers. A separate report from the Commerce Department on Wednesday showed factory orders increasing solidly in July, boosted by motor vehicles and fewer cancellations for aircraft orders. Still, orders remained below February's level.
Comments
Comments are closed.