WASHINGTON: US private employers hired fewer workers than expected for a second straight month in August, suggesting that the labour market recovery was slowing as the Covid-19 pandemic drags and government money to support workers and employers dries up.
Large businesses accounted for the bulk of the job gains shown in the ADP National Employment Report yesterday, with small enterprises posting a modest increase. A $600 weekly unemployment supplement expired on July 31, while a programme that gave businesses loans that can be partially forgiven if used for employee pay has also lapsed.
“The recovery in jobs lost in this pandemic recession was always a weak one,” said Chris Rupkey, chief economist at MUFG in New York. “But for a second month in a row it is looking like the jobs are not going to come back unless there is more stimulus from Washington to bolster economic demand and keep business activity and consumer spending growing.”
Private payrolls increased by 428,000 jobs last month. Data for July was revised up to show hiring gaining 212,000 jobs instead of the initially reported 167,000. The revision still left the July tally out of alignment with the 1.462 million rise in private employment reported by the government last month.
Economists polled by Reuters had forecast private payrolls would increase by 950,000 in August.
The ADP report, jointly developed with Moody’s Analytics, has fallen short of the government payrolls count since May because of methodology differences. The ADP report is based on active employees on company payrolls.
The Labor Department’s Bureau of Labor Statistics (BLS) counts a worker as employed if they received a paycheck during the week that includes the 12th of the month.
When businesses were shuttered in mid-March, millions of workers were either laid off or furloughed. Some economists believe that the return of furloughed workers when most businesses reopened in May boosted the employment numbers reported by the government.
Moody’s Analytics chief economist Mark Zandi told reporters he expected the gap between the ADP and BLS private payrolls narrowed in August. The government is scheduled to publish August’s employment report tomorrow.
According to a Reuters survey of economists, private payrolls probably increased by 1.265m jobs in August after rising 1.462m in July. Such a gain would result in nonfarm payrolls advancing by 1.4m jobs last month after increasing 1.763m. That would leave nonfarm payrolls about 11.5m below their pre-pandemic level.
Stocks on Wall Street were trading higher. The dollar rose against a basket of currencies. US Treasury prices fell.
&uuid=(email))