Private payrolls surged by 296,000 in April, much higher than expected, ADP says

[BumRushDaShow]

Source: CNBC

Hiring at private companies unexpectedly swelled in April, countering expectations for a cooling job market ahead, payroll processing firm ADP reported Wednesday.

Private payrolls rose by 296,000 for the month, above the downwardly revised 142,000 the previous month and well ahead of the Dow Jones estimate for 133,000. The gain was the highest monthly increase since July 2022.

The surge comes despite Federal Reserve efforts to slow economic growth and in particular to tame a powerful labor market that has added more than 800,000 jobs this year by ADP’s count. An imbalance of demand over supply in the labor market has created strong wage gains that are reflected in persistent inflation pressures.

One positive sign for the Fed is that annual pay rose 6.7% over the past year, a deceleration from gains that had been consistently coming in above 7%. “The slowdown in pay growth gives the clearest signal of what’s going on in the labor market right now,” ADP chief economist Nela Richardson said. “Employers are hiring aggressively while holding pay gains in check as workers come off the sidelines.”

Read more: https://www.cnbc.com/2023/05/03/adp-jobs-report-april-2023.html

[IronLionZion]

1. I can't wait to see conservatives spin this as bad

Biden is inflating jobs and wages OMG!1!!!



GOP is desperately hoping for a return to "they're stealing our jobs". But unfortunately for them we are still in "Nobody wants to work anymore"

[progree]

2. Well, real (i.e. inflation-adjusted) pay has finally turned up lately

One positive sign for the Fed is that annual pay rose 6.7% over the past year, a deceleration from gains that had been consistently coming in above 7%. “The slowdown in pay growth gives the clearest signal of what’s going on in the labor market right now,” ADP chief economist Nela Richardson said. “Employers are hiring aggressively while holding pay gains in check as workers come off the sidelines.”

“The slowdown in pay growth gives the clearest signal of what’s going on in the labor market right now,”

Doesn't sound very upbeat. But consider inflation-adjusted salary and wages



This particular one is inflation-adjusted wage and salaries for private sector workers.

Note the build-up to the Q2.2020 peak. Then it plateaued through Q1.2021, then went down.
Finally it has been turning up since a local bottom in Q3.2022 for a couple of quarters.
The last reading is 3.7% below the peak, and 3.4% below the Q1.2021 value.

Source: https://fredblog.stlouisfed.org/2018/02/are-wages-increasing-or-decreasing

The source link just above also compares to inflation-adjusted average hourly earnings and also to inflation-adjusted median usual earnings of full-time workers.

So maybe wage and salary growth is decelerating, as the excerpt says, but inflation is also decelerating even more so. Finally giving workers an increase in the purchasing power of their wages over the last 2 quarters.

This (the Employment Cost Index) is reportedly the Fed's favorite wage and salary indicator.

==================================================================
From: https://www.piie.com/blogs/realtime-economic-issues-watch/us-wages-grew-fastest-pace-decades-2021-prices-grew-even-more
The BLS releases ECI statistics, showing compensation, wage, and benefit growth over the prior three months, four times a year. The ECI shows changes in wages and benefits in a manner that fixes the composition of the workforce. This is important, particularly when there are large changes in employment, because these data are not subject to the same distortions as the monthly average hourly earnings series, which can artificially be increased when low-wage workers lose their jobs and drop out of the sample (as happened in 2020) or artificially be decreased when these same workers are hired back (as happened in 2021) [1].

By fixing workforce composition, the ECI provides a more accurate picture of what is actually happening to wages.

[1] The Pandemic’s Effect on Measured Wage Growth, The WHite House, 4/19/21
https://www.whitehouse.gov/cea/written-materials/2021/04/19/the-pandemics-effect-on-measured-wage-growth/

[mahatmakanejeeves]

3. 3 indicators the job market is seeing what one economist calls an 'unambiguous cooldown'

PERSONAL FINANCE

3 indicators the job market is seeing what one economist calls an ‘unambiguous cooldown’

PUBLISHED TUE, MAY 2 2023 • 2:32 PM EDT • UPDATED TUE, MAY 2 2023 • 6:57 PM EDT

Greg Iacurci
@GREGIACURCI

KEY POINTS
• Job openings and worker quits declined and the layoff rate increased in March, according to the Job Openings and Labor Turnover Survey issued Tuesday by the U.S. Bureau of Labor Statistics.
• The Federal Reserve has raised interest rates to slow the economy and labor market in an attempt to rein in inflation.
• However, the job market is still strong for workers and the unemployment rate is at multidecade lows.

The job market is still hot but is clearly slowing from the scorching levels seen during much of the past two years, according to labor experts.

Job openings and voluntary worker departures or, quits, declined in March, while the layoff rate increased, according to data issued Tuesday by the U.S. Bureau of Labor Statistics.

“Two words: unambiguous cooldown,” Nick Bunker, director of North American economic research at job site Indeed, said of the data in the Job Openings and Labor Turnover Survey.

{snip}

[Historic NY]

4. This keep ruining the Republicans narrative.

This really hurting Kevin McCarthy and the Republicans ghastly image of a failing economy.