The private sector has seen a slump in the number of hired employees for the month of July. Newly released data also showed that hiring from mid-sized private sector companies lost 25,000 employees in July.
New data released by Automatic Data Processing, Inc. (ADP) shows a decline in the number of jobs added to the economy by the private sector ahead of July job data reports due to be released on Friday. The data showed a continuation of struggle in the private sector as the US economy continues to open up after months of coronavirus related lockdowns.
Data from the private sector
The ADP data on the private sector was also below expectations of many experts who predicted that the job growth of the private sector would be upwards of over 1.6 million additional jobs. This optimism had been due to many states rolling back the months-long lockdowns that had slowed down the economy, leading to job losses across the country.
The ADP data showed that, for mid-sized private sector firms, employment declined by 25,000 whereas, for large companies with more than five hundred employees, the data showed a rise in employment of about 129,000. Small companies with less than 50 employees also added 63,000 jobs in July.
However, a recent surge in coronavirus cases the country has made it difficult for businesses to fully reopen, with some states considering restrictions to curb the spread of coronavirus.
Ahu Yildirmaz, vice president of the ADP Research Institute said that the data showed that there was a slow down of market recovery in July. He also continued by saying that this slow down in market recovery had impacted businesses’ ability to hire new workers, leading to a slump in employment in the private sector.
Federal Reserve chair on the economy
Federal Reserve Vice Chair Richard Clarida, in an interview with CNBC, acknowledged that the economic recovery had slowed down in July, following a bounce back in May and June, when states started reopening their economies.
Clarida, however, was positive that, in the third quarter, they expected the economy to improve. On when the economy would go back to the same levels it was before the coronavirus hit the US, Clarida stated that it would take a long time for the US to recover from the impact of the virus. He said that he expected the recovery to stretch to the end of next year.
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