Report: US Labor Market Remains Strong as Wage Growth Slows
American companies added 324,000 jobs last month, while wage growth slowed.
That’s according to data published Wednesday (Aug. 2) by the ADP Research Institute.
The bulk of the new jobs came from the hospitality/leisure sector, the report said, which added 201,000 positions.
Meanwhile, wage growth slowed, with workers seeing a 6.2% pay increase compared to July of 2022, the slowest increase since November 2021. Among workers who switched jobs, the median pay increase was 10.2%, another two-year low.
“The economy is doing better than expected and a healthy labor market continues to support household spending,” Nela Richardson, ADP’s chief economist, said in a news release. “We continue to see a slowdown in pay growth without broad-based job loss.”
Earlier this summer, PYMNTS reported on government data that showed people’s work hours were dropping, as was their take-home pay.
“Altogether, while jobless numbers seem to be inching up, the combined slowdown of hours and real earnings may be raising the rates of economic insecurity among consumers across the country,” PYMNTS wrote.
And many of these people are seeking supplemental income to make ends meet, as shown in the report “New Reality Check: The Paycheck-to-Paycheck Report,” a collaboration between PYMNTS and LendingClub.
Almost 25% of surveyed consumers said they had a side job to help pay their bills, with the largest age demographic living this way: millennials (37%) and Generation Z (36%).
“It could be no coincidence that these are the two age groups also with highest rates of living paycheck to paycheck, at 73% and 66%, respectively,” PYMNTS wrote Tuesday (Aug. 1), following another job report.
That one, from the U.S. Department of Labor, showed job openings dropping to 9.6 million in June, down a bit from May but much lower than the 10.3 million in April and the lowest level in more than two years.
In addition, the figures showed that the number of people leaving jobs in June fell from 4.1 million to 3.8 million, another indicator of a slowing job market.
Amid all this, people are struggling to stay afloat, as PYMNTS research has found, with 45% of surveyed consumers making only minimum or partial payments on their credit cards.
“The most inflation-stressed consumers, categorized by PYMNTS as living paycheck to paycheck with issues managing bills, have been missing due dates since at least the start of 2023,” that report said. “And for subprime borrowers as well as consumers across financial lifestyles, limits are being hit as savings can’t be further stretched.”
The post Report: US Labor Market Remains Strong as Wage Growth Slows first appeared on PYMNTS.com.