Even if the hiring rate did not go up at a fast pace this month, the U.S. private sector still added about 185,000 workers. This is definitely a lower number compared to June’s 229,000 job gains, but it still shows that the employment market is strong.
These figures were revealed by Payroll processor ADP, which only covers the private sector. However, economists predict that the actual number rises to about 225, 000 added workers. This does not change the unemployment rate, which remains steady at 5.3 percent.
According to reports, it was large firms that mostly made the hiring in July. Small businesses, with 50 employees or fewer, only added 59,000 job gains in July, down from more than 100,000 reported last month. On the other hand, larger companies added about eight times more workers than they did in June.
The business service sector added about 42,000 workers in July, which is 19,000 fewer compared to last month. The transport, utilities and the financial business also added fewer jobs.
Because of the increased number of people hired since last year, home pricing has gone up by at least 6 percent all over the country, which led to higher demand for accommodation. This is one of the reasons why construction firms counted 15,000 more workers.
The decline in oil prices have also had an influence on the job market. For instance, manufacturing businesses only added 2,000 workers.
The low-priced oil will most likely lead to layoffs in the energy sector in the following months, according to Mark Zandi, who is a chief economist and Moody Analytics. This will slow down the hiring rate even more.
In spite of this, he estimates that there will still be about 200, 000 more jobs available on the market every month, which will have a positive impact on the unemployment rate this year and on the interest rates, which are currently extremely low.
A representative of the Federal Reserve said that interest rates might be higher this year, maybe starting with September. This largely depends on the economy and on the hiring rate. Surveys have shown that people are still reluctant to spending, even if consumer satisfaction has been on the rise lately.
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