Asset Classes

Free investment financial education

Language

Multilingual content from IBKR

Close Navigation
Learn more about IBKR accounts

US Private Sector Adds 324,000 Jobs In July, Surpassing Expectations: Job Market Demonstrates Strong Resilience

Posted August 2, 2023 at 10:15 am
Piero Cingari
Benzinga

ZINGER KEY POINTS

  • Private businesses added 324,000 jobs in July, well above the expected 189,000, according to ADP report.
  • Markets were volatile on Wednesday after a downgrading of the United States’ credit rating by Fitch caused widespread risk aversion.

The American labor market is demonstrating remarkable resilience, as evidenced by the latest employment report from Automatic Data Processing Inc.. In July, the pace of new job growth experienced a modest decline, dropping from almost half a million new jobs in June to 324,000, still significantly surpassing economist expectations of 189,000 new employees.

The ADP employment data serves as a preview for the eagerly awaited jobs report on Friday, with economists expecting a drop in non-farm payrolls to 200,000 in July, a stable unemployment rate at 3.6% and a cooling of annual wage growth rate to 4.2%.

July’s ADP Employment Report: What You Need To Know

  • U.S. private businesses added 324,000 new employees in July, less than the downwardly revised 455,000 figure from June, but well above the expected 189,000.
  • Nela Richardson, ADP’s chief economist, said: “The economy is doing better than expected and a healthy labor market continues to support household spending. We continue to see a slowdown in pay growth without broad-based job loss.”
  • The growth in employment primarily stemmed from small and midsized companies, which added 237,000 and 138,000 jobs, respectively. In contrast, large companies reported a decline of 67,000 jobs.
  • Leisure and hospitality were again the biggest drivers of job creation, adding 201,000 new employees. Employment losses were recorded in manufacturing, down 36,000, and financial activities, down 5,000.
  • Pay growth extended its downward trend in July. Job stayers saw an annual increase of 6.2%, the slowest pace of gains since November 2021. For job changers, pay growth slowed to 10.2%.

Market Reactions:

Traders adjusted their expectations for interest rate hikes downward, partly influenced by Fitch’s downgrade of the United States’ long-term foreign currency issuer default rating from AAA to AA+.

The market-implied probability of a rate hike in September narrowed to 15% and the likelihood of a rate hike by November eased to 27%.

Stocks exhibited volatility on Wednesday, with S&P 500 futures trading in negative territory.

Originally Posted August 2, 2023 – US Private Sector Adds 324,000 Jobs In July, Surpassing Expectations: Job Market Demonstrates Strong Resilience

Join The Conversation

If you have a general question, it may already be covered in our FAQs. If you have an account-specific question or concern, please reach out to Client Services.

Leave a Reply

Disclosure: Benzinga

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Disclosure: Interactive Brokers

Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Benzinga and is being posted with its permission. The views expressed in this material are solely those of the author and/or Benzinga and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.