US jobs growth slows in July, sending dollar lower
Private sector employment in the US increased by 185,000 jobs in July, short of economists’ expectations, sending the dollar lower.
The increase was the smallest rise since April. In June, the figure rose by 229,000, revised down from 237,000. The dollar took a battering on the data release, with the euro gaining nearly half a cent to $1.0936.
The ADP National Employment Report, jointly developed with Moody’s Analytics, came ahead of the US Labor Department’s own non-farm payroll report on Friday, which included both private and public sector employment. The ADP report lowers expectations of a strong Labor Department report later this week.
Read more: Non-farm payroll – US jobs in biggest jump this year
Mark Zandi, chief economist of Moody’s Analytics, said:
Job growth is strong, but it has moderated since the beginning of the year. Layoffs in the energy industry and weaker job gains in manufacturing are behind the slowdown. Nonetheless, even at this slower pace of growth, the labour market is fast approaching full employment.
Employment reports for July and August are seen as key factors in the Federal Reserve’s decision over whether or not to raise rates in September for the first time in almost a decade.
Read more: Federal Reserve Chair Janet Yellen says US interest rates should rise in 2015
Expectations are for a gain of 223,000 non-farm pay-roll jobs on Friday, with the jobless rate holding at 5.3 per cent, the lowest level since April 2008, according to economists surveyed by Reuters.
Jobs were mostly created in large businesses. Businesses with 500 employees or more employed an extra 64,000 people, while businesses with 50-499 employees took on an extra 62,000 people. Businesses with fewer than 49 employees hired an extra 59,000 workers.