MNI BRIEF: ADP's Richardson Sees Normalizing US Labor Market

MNI (WASHINGTON) - U.S. private-sector jobs and pay gains slowed in July, reflecting a "normalizing" labor market after a torrid pace of hiring and wage increases in the pandemic era, ADP chief economist Nela Richardson said Wednesday. 

Private employers added 122,000 jobs in July, well below market forecasts for a 168,000 increase, according to the ADP National Employment Report, though Richardson cautioned the number may have been affected by the hurricane in Houston during the reference week that left millions without power. Annual pay gains for job stayers fell to 4.8% this month, the slowest in three years, while gains for job changers dropped five-tenths to 7.2% from a month earlier, compared to 9% at its pandemic-era high. "The payoff for switching jobs has dropped tremendously. That partially explains the slowdown in hiring." Richardson said. "If inflation picks up, and no one thinks that's likely right now, but it won't be because of labor." 

"This has been a remarkable job market, and it is a normalization that we've seen in the data, back toward a normal pace of gains," Richardson said. (See: MNI INTERVIEW: Worries Over US Job Weakness Overdone- Bullard)