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US hiring drops off in August: ADP survey
WASHINGTON, Sept 6, 2018 (BSS/AFP) – Hiring by US companies slowed sharply in
August dropping far more than economists expected, with moderation in
manufacturing and services, payrolls firm ADP said Wednesday.
However, the closely-watched data are about in line with the expected
slowdown in the official employment report due out Friday.
ADP said the private sector added 163,000 jobs last month, after an
increase of 217,000 in July, as goods producing firms hired 24,000 — about
half the pace of the prior month.
The massive services sector hired 139,000 new workers, 38,000 fewer than in
July.
The report showed slowing across many industries, with notable drop in
hiring in construction, business services and healthcare.
And the mining sector actually shed 1,000 jobs.
“Although we saw a small slowdown in job growth the market remains
incredibly dynamic,” Ahu Yildirmaz, vice president and co-head of the ADP
Research Institute, said in a statement.
Employers have been expressing concerns for months that they are struggling
to fill open positions and find qualified workers. That has led to reports of
rising wages, and poaching of workers from the competition.
Mark Zandi, chief economist of Moody’s Analytics, said, “Employers are
aggressively competing to hold onto their existing workers and to find new
ones. Small businesses are struggling the most in this competition.”
That could become a concern for the Federal Reserve if wage increases
become more widespread and start to pressure inflation, which so far has
remained about in line with the two percent target.
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The Fed has raised the benchmark interest rate twice this year and is
expected to hike again later this month and again in December as it works to
head off rising prices.
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.
Economists are expected the government report to show an increase of
175,000 private jobs.
BSS/AFP/SR/1840 HRS