American companies added 122,000 jobs this month, while wage growth continued to slow.
That’s according to the latest monthly employment report from ADP, released Wednesday (July 31), showing the number of new private sector jobs is down from 155,000 in June. Wage increases slowed to 4.8%, the slowest pace in three years, while increases for people changing jobs slowed from 7.7% to 7.2% in July.
“With wage growth abating, the labor market is playing along with the Federal Reserve’s effort to slow inflation,” said Nela Richardson, ADP’s chief economist. “If inflation goes back up, it won’t be because of labor.”
A little less than half of the new jobs came from the trade/transportation/utility sector, at 61,000. The largest cuts came from the professional/business services sector, which lost 37,000 jobs.
The report comes at a moment when, as noted here earlier this week, consumers feel relatively confident about the job market but are still deeply concerned about rising prices.
The Conference Board Consumer Confidence Index showed a modest increase this month, a sign of mixed sentiments from American consumers.
The index rose to 100.3 from a revised 97.8 in June, though this uptick masks underlying concerns. The Present Situation Index, which examines current business and labor market conditions, fell to 133.6 from 135.3, signaling that consumers see a slight deterioration in the present economic situation.
By contrast, the Expectations Index, which reflects consumers’ short-term outlook for income, business and labor market conditions, rose to 78.2 from 72.8 last month, still below the 80-point mark, often seen as a recession indicator.
Dana M. Peterson, chief economist at The Conference Board, noted that while confidence rose, it was still within the limited range seen over the last two years.
“Even though consumers remain relatively positive about the labor market, they still appear to be concerned about elevated prices and interest rates, and uncertainty about the future; things that may not improve until next year,” Peterson said.
Meanwhile, the latest version of the University of Michigan’s Index of Consumer Sentiment showed a decline, as higher prices still pressure lower-income consumers.
PYMNTS Intelligence research has found that these consumers are seeing the vast majority of their earnings go toward covering their basic needs, as those who make less than $50,000 annually spend 72% of their income each month covering food, monthly bills and housing, with the lion’s share going to the latter.
In addition, the latest installment of the PYMNTS Intelligence study “New Reality Check: The Paycheck-to-Paycheck Report” shows that around two-thirds of consumers live paycheck to paycheck, with close to a quarter of them having issues covering their monthly bills.
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