Major Payroll Report Shows Slowdown in the Number of New Jobs Added By Private Companies
Private companies added 330,000 jobs in July, far fewer than expected and the lowest number since February, according to a major payroll report.
The 330,000 jobs added to private payroll last month represented a significant decline from the 680,000 jobs added in June, the ADP National Employment Report showed.
According to the report, “The matched sample used to develop the ADP National Employment Report was derived from ADP payroll data, which represents 460,000 U.S. clients employing nearly 26 million workers in the U.S.”
Economists predicted that private companies would add 653,000 jobs in July, nearly double the number reported Wednesday, according to CNBC.
“The labor market recovery continues to exhibit uneven progress, but progress nonetheless,” ADP Chief Economist Nela Richardson said in a statement
“July payroll data reports a marked slowdown from the second quarter pace in jobs growth.”
“The slowdown in the recovery has also impacted companies of all sizes,” she continued.
“Bottlenecks in hiring continue to hold back stronger gains, particularly in light of new COVID-19 concerns tied to viral variants.”
Overall, small businesses added 91,000 jobs, medium-sized businesses added 132,000 jobs and large businesses added 106,000 jobs, the ADP report showed. Businesses with less than 20 employees added just 37,000 jobs nationwide.
The leisure and hospitality sector grew the most with 139,000 jobs added in July. Franchise stores added 105,400 with the bulk of those coming in the restaurant industry, according to the ADP report.
The major stock market indicators dropped sharply Wednesday morning after ADP released the report.
The Dow Jones Industrial Average dropped 0.56 percent while the S&P 500 remained 0.35 percent down one hour after the market opened.
The Dow closed down 0.92 percent. The S&P closed down 0.46 percent.
Meanwhile, the number of job openings has surged to all-time highs in recent months, according to Department of Labor data. There are currently an estimated 9.2 million job openings nationwide while the national unemployment rate hovers near 6 percent.
The unemployment rate had dropped to 3.5 percent in February 2020 before the pandemic triggered a recession.
But Richardson predicted that barriers to job growth, such as new coronavirus variants, will subside making way for large future private payroll gains.
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