Private sector employers added 218,000 jobs in July in a further sign of the rebounding economy, although the pace of job growth slackened from last month, according to the latest national employment report from payroll giant ADP.
The gains were widespread across company sizes and industries, although somewhat less than in June (see
“Although down from June, the July jobs number marks the fourth straight month of employment gains above 200,000,” said ADP president and CEO Carlos Rodriguez in a statement.
The service sector led the way, adding 202,000 jobs, down from 238,000 in June, while the goods-producing sector gained 16,000 positions, down from 43,000 in June.
The professional and business services sector, which includes accounting and tax along with other services, added 61,000 jobs in July, but that was down from 79,000 in June. The financial activities sector added 9,000 jobs, down 25 percent from, June. The construction industry gained 12,000 jobs, but less than half of last month’s increase, while the manufacturing industry added 3,000 jobs, less than a third of the number of jobs added in June. The combined trade, transportation and utilities sector added 52,000 jobs overall, a slight decrease from the 56,000 job increase in June.
Mark Zandi, chief economist of Moody’s Analytics, which compiles the national employment reports with ADP, noted that the job gains were broad based across all industries and all company sizes. “This is a string of 200,000-plus job gains,” he said in a conference call with reporters Wednesday. “Since the beginning of the year, it looks like we’ve created 1.5 or 1.6 million jobs. We’re on track to create almost 3 million jobs for the year. That's a pretty good year by any historical standard.”
He predicts that the U.S. economy will be back to full employment by the end of 2016 as discouraged unemployed workers re-enter the labor force and more workers move from part-time to full-time work. “The slack is being quickly absorbed and all the trend lines at this point look very positive,” he said. “The job market is humming and it feels very good.”
Zandi is also seeing the quality of the job gains improving, as companies add more high-paying jobs in areas like professional services, high-end manufacturing and the technology sector. Even state and local governments are hiring again. The retail and leisure and hospitality sectors are still adding low-paying jobs as well, as they did at the start of the recovery. However, wage growth is not keeping pace with the rate of inflation.
