Private sector added 428,000 jobs in August, says ADP
The private sector gained 428,000 jobs in August, especially within large companies, according to payroll giant ADP, a tentative sign of a continuing economic recovery despite the COVID-19 pandemic.
Small businesses gained 52,000 jobs, including 43,000 in businesses with between one and 19 employees, and 9,000 in companies with between 20 and 49 employees. Medium-size businesses with between 50 and 499 employees gained 79,000 jobs. Large businesses added 298,000 jobs, including 28,000 in companies with between 500 and 999 employees and 270,000 in corporations with 1,000 employees or more.
The bulk of the gains occurred in the service sector, which added 389,000 jobs, including 66,000 in professional and business services such as accounting and tax preparation, and 11,000 in financial activities such as banking. The goods-producing sector, in contrast, gained only 40,000 jobs last month, mainly in the construction industry, which added 28,000 jobs. Franchise jobs increased by 21,500.
Still, the job gains in recent months don’t yet make up for the massive job losses earlier this year when the pandemic took hold across the country. “The August job postings demonstrate a slow recovery," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, in a statement Wednesday. "Job gains are minimal, and businesses across all sizes and sectors have yet to come close to their pre-COVID-19 employment levels.”
“The job market continues to climb out of the dark hole it fell into at the start of the pandemic back in March and April,” said Mark Zandi, chief economist at Moody’s Analytics, which compiles the monthly national employment report with ADP. “But the climb out is slow and the risks are high that it will fall back in. That’s the message in the August ADP numbers.”
Most of the increase is coming from industries that have been directly impacted by the pandemic, Zandi noted. “That would include things like restaurants, retailing, leisure and hospitality,” he said during a conference call with reporters Wednesday. “Temp help is also seeing sizable gains as companies are hiring more temporary workers, reflecting the uncertain economic environment. Employment growth in all the other industries, from manufacturing to mining and professional and financial services, that was more pedestrian, kind of lackluster. So all the action, all the growth since the April low has aided industries that were directly impacted.”
ADP also revised upward the July total of jobs added from 167,000 to 212,000.