MNI BRIEF: ADP's Richardson Sees Pockets of Weakness in US Job Market
MNI (WASHINGTON) - The concentration of U.S. job growth in a few industries last month and a consistent cooldown in pay growth hints at labor market weakness over the next six months, ADP Chief Economist Nela Richardson said Wednesday ahead of the release of the Labor Department's jobs report for June.
The leisure and hospitality sector contributed 40% of the 150,000 gain in private employer hiring in ADP's national employment report released Wednesday, followed by construction at 27,000 and professional and business services at 25,000. "It's already evident we're starting to see pockets of weakness," she told reporters on a call. The very concentrated mix of jobs could highlight some continued weakness over the next six months, at a time when "the consumer is starting to be more weary," she said.
If monthly payrolls growth dips below 125,000, "we have to reassess the health of the labor market," she said. (See: MNI INTERVIEW: Fed Already Well Behind The Curve On Cuts - Tracy)
ADP's wage report for June showed job stayers saw a 4.9% pay increase, the slowest since August 2021, while pay grains for job changers edged down a tenth to 7.7%. "It's just not as competitive as it used to be," Richardson said.