Private sector employers added 190,000 jobs in August, according to payroll giant ADP, in another sign of steady employment gains.
Small businesses added 85,000 jobs last month, an increase of over one-third from July. That total includes 50,000 jobs added at businesses with between one and 19 employees and 35,000 in businesses with between 20 and 49 employees.
Midsize businesses with between 50 and 499 employees gained 66,000 jobs in August, 5,000 more than in July.
Large businesses with 500 or more employees added 40,000 jobs in August, down from 53,000 in July. That total included approximately 5,000 jobs added at companies with between 500 and 999 employees, and approximately 34,000 jobs at companies with over 1,000 employees.
Service-providing employment rose by 173,000 jobs in August, up slightly from 170,000 in July. The professional and business services sector, which includes accounting, tax preparation and other services, contributed 29,000 jobs in August, up 3,000 from July. The combined trade, transportation and utilities sector grew by 28,000 in August, down from 34,000 the previous month. The 13,000 new jobs added in financial activities in August was a gain from July’s 10,000. Franchise businesses added 22,800 jobs in August.
Goods-producing employment rose by 17,000 jobs in August, more than double the 7,000 gained in July. The construction industry added 17,000 jobs in August, up from 15,000 last month. The manufacturing industry added 7,000 jobs in August, after gaining only 1,000 in July.
Mark Zandi, chief economist at Moody’s Analytics, which compiles the national employment report with ADP, noted that the 190,000 jobs added in August is consistent with the approximately 200,000 jobs that have been added on a monthly basis fairly consistently over the past three years. “It’s been pretty rock solid around 200K, and today’s ADP number suggests that hasn’t changed,” he said during a conference call with reporters Wednesday. “That’s good news, particularly in the context with the recent ups and downs and all-arounds in the global financial markets, particularly the correction we’re now experiencing in the U.S. equity market. It’s almost certainly too early to gauge the fallout from that. The correction is still ongoing, so we’ll have to see how this plays out. But at least so far, there’s no indication that the turmoil and volatility and the decline in equity prices is having a material impact on the labor market. That’s evident not only in the ADP data. It’s also evident in the unemployment insurance data and also in some of the consumer confidence measures we’ve been getting.”
He predicted the official job numbers that come out on Friday from the U.S. Bureau of Labor Statistics might be affected by fluctuations in temporary seasonal employment that could lower the number to 165,000 jobs added in the private and public sectors in August. Nevertheless, Zandi believes the unemployment rate may decline from the current level of 5.3 percent in July to 5.2 or perhaps even 5.1 percent. The Federal Reserve’s upcoming decision on whether to raise interest rates is likely to be influenced by the job numbers, as well as the BLS data on wage growth, in addition to the current jitters in the stock market.
“For the average American, I don’t know that it means a whole lot whether the Fed begins to raise rates in September, October or even in December,” said Zandi. “What matters for most folks is, are we creating jobs? Are they in most parts of the country? Are they in most industries? Are they across all pay scales? The definitive answer to that question is yes. The job market is doing well and producing jobs in all corners of the country, industries, company sizes and pay scales, so the job market is good and all indications so far are that it’s weathering the storm in the financial markets relatively well.”
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