During the month of August companies drastically reduced the pace of hiring, amid the inflationary scenario and fears of an economic recession in the country.
The payroll processing company ADP said that private payrolls slowed from 268,000 in July to 132,000 in the following month. This equates to a reduction of 136,000, more than 50%.
The company’s chief economist Nela Richardson said that, “We could be at a tipping point, from supercharged work increases to something more normal.”
“Our data suggests a shift to a more conservative hiring pace, possibly as companies try to decipher mixed signals from the economy,” Richardson said.
The report shows that industries associated with services accounted for most of the jobs, with 110,000 jobs added; leisure and hospitality grew 96,000; while commerce, transportation and public services rose by 54,000.
By contrast, the financial activities sector had a loss of 20,000; education and health services, 15,000; and professional and business services, 14,000, the report says.
Among other findings, companies with 500 or more employees increased 54,000medium-sized companies increased 53,000 and those with less than 50 employees had a profit of 25,000.
The ADP report comes after year-on-year inflation in July stood at 8.5%, after hitting 9.1% in June, one of the highest in 40 years. It also coincides with the contraction of the Gross Domestic Product (GDP) for the second consecutive quarter, of 0.9%, after registering 1.6% in the first quarter.
For the week ending August 13, claims for unemployment benefits showed a slight drop of 250,000, after recording 252,000 in the previous period.
Next Friday’s nonfarm payroll report is expected to show an increase of 318,000.
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Source: La Opinion