US private hiring slows more than expected in January: survey
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Private employers in the United States slowed their hiring pace in January, payroll firm ADP said Wednesday, in the latest sign that economic activity is cooling on efforts to rein in inflation.
Companies added 106,000 jobs last month, sharply down from 253,000 in December and below analyst expectations, but ADP cautioned that numbers in its reference week were affected by weather disruptions.
"Hiring was stronger during other weeks of the month, in line with the strength we saw late last year," said ADP chief economist Nela Richardson in a statement.
As the impact of the central bank's interest rate hikes ripple through the world's biggest economy, labor market strength has been a key focus in the inflation fight.
Policymakers are eyeing wage gains as companies competed to find and retain workers, concerned that this could lead to rising costs for services and make price increases more stubborn.
Annual pay was up 7.3 percent last month, the same rate as in December, said ADP in its recently revamped report which includes wage data.
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But for those who changed jobs, pay growth surged to 15.4 percent.
"Employment was soft during our Jan 12 reference week as the US was hit with extreme weather," said ADP on Wednesday.
Sectors where employment slipped included construction, along with trade, transportation and utilities.
Meanwhile, hiring in leisure and hospitality formed the lion's share in the service-providing industry.
While pay growth generally held steady, ADP noted an outlier was the information sector, where salary gains decelerated.
The Federal Reserve has raised the benchmark lending rate seven times last year in hopes of tamping down demand and countering inflation, but there are growing signs it might slow its pace of rate hikes further on Wednesday.
The Fed is expected to announce a smaller, 0.25 percentage point increase at the end of its policy meeting, down from the half-point hike in December and steeper jumps before.
ADP figures may offer a preview of the government's employment report due Friday, but Rubeela Farooqi of High Frequency Economics cautioned against extrapolating as numbers can "diverge substantially."
Overall, government data shows "the economy continues to create jobs at a strong pace, and the labor market is showing only gradual signs of softening despite a rapid increase in interest rates," she said.
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