The ADP (Automatic Data Processing) reported on Thursday that private sector employment in the U.S. increased by 99,000 jobs in August, and annual wages rose by 4.8%. This increase followed a rise of 111,000 jobs in the previous month.
Nela Richardson, the Chief Economist at ADP, stated that the labor market has slowed down less than expected, leading to a slower-than-usual decline in employment rates after nearly two years of continuous growth. Additionally, the wage growth indicates that the U.S. economy is still capable of expanding even amidst a high-interest-rate environment.
According to the FedWatch tool, the market is currently predicting nearly a 30% chance that the Federal Reserve (Fed) will cut the policy interest rate by 50 basis points (bps) in the upcoming policy meeting. Despite the higher-than-expected increase in private sector employment, most analysts still believe that the Fed may only cut the rate by 25 bps due to the strong labor market.
Source: Fxstreet