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The slowdown is not necessarily a negative. The moderation could indicate more sustainable payroll growth going forward,
“We think this primarily reflects slowing wage growth, especially in high-touch sectors like leisure and healthcare that were more strongly impacted by persistent labor problems during that period,” economist
Small businesses have been pressured over the past two years due to high inflation, high costs and a labor crunch. But labor shortages are easing, and wage inflation is starting to come down.
The trends differ by industry. There's some slowing of payroll growth in lodging, restaurants and retail, though continuing strong jobs growth in these areas is somewhat offsetting this impact, according to the report.
The healthcare industry, meanwhile, is still seeing strong payroll growth, reflecting post-pandemic staffing increases and higher demand for health services among aging baby boomers (those born between 1946 and 1964).
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