Kamala Harris’s attempts to sell Americans on the idea that the U.S. economy is doing well may have become a bit harder.
U.S. businesses added a mere 122,000 jobs in July, according to payroll giant ADP, signaling a cooling labor market and fewer hires. This modest increase is the smallest in six months and falls short of the 150,000 jobs predicted by economists.
While Harris has recently said manufacturing in the U.S. is booming, the ADP report tells a different story. Manufacturing jobs fell in July, ADP said.
Construction added 39,000 and trade, transportation, and utilities added 61,000, leading the gaining sectors. Leisure and hospitality, a major source of job growth last year, added a modest 24,000. Health and education added 22,000.
Professional and business services employment declined by 47,000, a possible signal of a souring economy. Information technology shed 18,000, which is a lot of job losses for a smaller segment of the economy.
The slowing job market has also taken a toll on wage growth. The year-over-year pay increase for workers who stayed in the same job dipped to a three-year low of 4.8 percent in July.
“With wage growth slowing down, the labor market is aligning with the Federal Reserve’s efforts to curb inflation,” said ADP’s chief economist, Nela Richardson. “If inflation goes back up, it won’t be because of labor.”
The Fed is now expected to cut interest rates soon. Some economists, including former New York Fed president Bill Dudley, have said that the Fed should start cutting as soon as today given the softening of the labor market and danger of a recession.
The government’s official jobs report for July is due on Friday While ADP’s numbers aren’t meant to match up with government’s official job report, they often trend in the same direction.
