Private sector employment increased by 213,000 jobs from August to September, according to payroll giant ADP, as the job market continued to show consistent gains.

Small businesses added 88,000 jobs in September, including 48,000 in businesses with between one and 19 employees, and 39,000 in small businesses with between 20 and 49 employees.

Midsize businesses with between 50 and 499 employees gained 48,000 jobs in September. Large businesses added 77,000 jobs, including 5,000 at businesses with between 500 and 999 employees, and 73,000 at larger companies with 1,000 employees or more.

The service sector accounted for the bulk of the job gains, adding 155,000 jobs, but that was down from 160,000 in August. The goods-producing sector gained 58,000 jobs in September, up from 42,000 jobs in August. 

The construction industry added 20,000 jobs in September, below August’s gain of 23,000. Meanwhile, manufacturing added 35,000 jobs in September, the highest total in that sector since May 2010.

The professional and business services sector, which includes accounting, tax and other services, contributed 29,000 jobs in September, down from 37,000 in August. Expansion in the combined trade, transportation and utilities sector grew by 38,000 in September, up from August’s 30,000.

In addition, 5,000 new jobs were added in the financial activities sector in September, while 16,930 jobs were added at franchises.

“The ADP number was strong, broad based and all in all a pretty good number,” said Mark Zandi, chief economist at Moody’s Analytics, which produces the national employment report with ADP, during a conference call with reporters Wednesday. “Over 200,000 jobs were created during the month. We’ve been getting 200,000 in monthly job gains on a consistent basis for the past 18 months, and close to 200K for the past three years, which is just a remarkably stable pace of job creation. The job gains are broad based across industries and company sizes.”

He pointed out that the manufacturing industry saw an unusually large gain in jobs in September, likely due in part to a big pickup in vehicle production and sales, although the gains in manufacturing were broad based across other types of production.

Zandi also pointed to other positive signs in the job market. “All the leading indicators for the job market look good,” he said. “I would guess we are going to continue to see this kind of job creation moving forward, at least through the end of the year and into early next [year]. Unemployment insurance claims are low, below 300,000 per week. That would be consistent with monthly job gains of 200K, so there are very low layoffs. We are seeing a surge in job openings.”

He cited a survey from the U.S. Bureau of Labor Statistics that showed since the beginning of the year the number of job openings has risen substantively. “We’re now back to pre-recession levels in job openings and it’s broad based across most industries,” said Zandi. “Job openings are a good leading indicator of hiring and thus job creation.”

Business sentiment and confidence are hard to measure, he acknowledged, but various surveys appear to be positive. “Hiring intentions are pretty strong,” said Zandi. “It feels like we’re going to continue to get solid job growth for the foreseeable future. At this pace of job growth, just north of 200,000 per month, that would be consistent with a steadily tightening labor market. The unemployment rate/underemployment rate should decline at roughly half a percentage point of the labor force per annum at this pace of job growth. Right now the unemployment rate is 6.1 percent. If the current pace of job growth continues, the unemployment rate will be closing in on 5 and a half percent. Then we’ll start to absorb the large number of people that stepped out of the work force because they were discouraged and couldn’t find job opportunities. They’ll start stepping back in, and it ultimately will absorb those part-timers that would like to work full-time. If everything roughly sticks to the script in this remarkably stable recovery and hangs together for the next two and a half to three years, we’re going to be back to full employment by late 2016.”

Zandi is seeing some indications that the tightening labor market is resulting in a pickup in wage growth. “You can see this most vividly in average hourly earnings from the BLS for production workers,” he said. “The acceleration in wage growth across industries and regions is consistent with where you would think labor markets are the tightest.”

He is seeing a strong pickup in wage growth in places like Texas and other parts of the country that are benefiting from the energy sector and the transportation industry, where there are reports of shortages of available truckers.

“It feels like we're now at the start of what will be a more substantive pickup in wage growth,” said Zandi. “My sense is a year from now or two years from now, wage growth will be above the rate of inflation. I think that’s going to be very key to sentiment and consumer confidence, and perhaps even the political environment. Most people, when they evaluate how well the economy is doing, because most people have jobs, are focused on their pay. ‘Did my pay increase this year to beat inflation, or did my pay increase this year beat my pay increase last year?’ For most people, up to this point in time, the answer is that their pay has risen at the rate of inflation so real wage growth has been zero and there has been no increase in living standards. We’ve seen no pickup in wage growth since the recession hit back in 2008 and 2009. I do think a year or two down the road we will see a wage growth pickup to the degree that it should begin to impact people’s confidence or perceptions of the economy.”

Zandi anticipates that when the BLS issues the official government jobs report on Friday, it will show a gain of 220,000 in payroll employment and that the soft employment gain numbers that the BLS reported in August will be revised upward. ADP was expecting close to 200,000 jobs gained in the month of August, but the BLS reported 142,000 instead.

“It’s not unusual for August to come in light on the first print from the BLS,” said Zandi. “It’s a month when a lot of people are on vacation and reporting to the BLS is slow. Historically we’ve seen subsequent upward revisions to the August employment number. My guess is that with the number on Friday, we will get a revision of the August number by 25 to 30K and get another revision next month of another 25 to 30K to August. When all the revisions are in, and there are a lot of revisions, the August number will be close to 200K, very consistent with the kind of job creation we’ve been getting over the past several years. All the trend lines look pretty good. At this point, it’s hard to see what could derail the improving job market, at least for the next few months. The prospects are quite good.”

Accounting Today asked Zandi about the dip in job numbers in September in the professional and business services sector from 37,000 to 29,000, and how much could be in accounting and tax services as opposed to other types of services. However, ADP does not break out the numbers in that category, and Zandi cautioned that despite some volatility from month to month, the trend has been upward for professional and business services over a three- or six-month period. “It’s a pot pourri of different kinds of activities, and these activities have very different kinds of seasonal patterns, tax filing for example,” he pointed out. In addition, some of the volatility in some types of professional and business services comes from temporary jobs and temp agency jobs.

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