U.S. firms slow hiring and wage gains moderate, ADP data show
Hiring at U.S. companies cooled in November to the slowest pace in nearly two years and wage gains moderated, suggesting employers might be starting to hit the brakes amid a darkening economic outlook.
Businesses’ payrolls rose 127,000 this month, the smallest gain since January 2021, according to data from ADP Research Institute in collaboration with Stanford Digital Economy Lab. The median forecast in a Bloomberg survey of economists called for a 200,000 advance.
“Turning points can be hard to capture in the labor market, but our data suggest that Federal Reserve tightening is having an impact on job creation and pay gains,” Nela Richardson, chief economist at ADP, said in a statement Wednesday. “In addition, companies are no longer in hyper-replacement mode. Fewer people are quitting and the post-pandemic recovery is stabilizing.”
The payrolls data point to a more significant slowing in the labor market, which has so far been largely stubborn to cave under aggressive interestrate hikes by the Fed.
Wage growth, while remaining strong, also continued to moderate across industries. While that’s disheartening for American workers, it’s a welcome development for policymakers in their crusade against decades-high inflation.
Workers who stayed in their jobs experienced a 7.6% pay increase from a year ago, ADP show, marking the second monthly straight deceleration and suggesting workers’ bargaining power might be starting to erode. For those who changed jobs, the median increase in annual pay was 15.1%.