Private sector employment increased by 9,000 jobs in July, according to the latest monthly report by payroll giant ADP, but there were still substantial job losses at large and midsized companies.

Small businesses, with between one and 49 employees, added 50,000 jobs from June to July. However, midsized businesses with between 50 and 499 employees lost 9,000 jobs, while large businesses with more than 499 employees lost 32,000 jobs.

The biggest losses were in the goods-producing sector, which lost 65,000 jobs, including 49,000 in the manufacturing industry. The service sector, on the other hand, added 74,000 jobs.

ADP also revised upward its June figures from a decrease of 79,000 jobs to a decrease of 77,000 jobs (see ADP Report Shows 79,000 Jobs Lost in June).

While the latest report does not show signs of a recession, it also doesn't indicate an economic recovery either. "An increase of 9,000 in total employment is a soggy number and seemingly consistent with rising unemployment," said Joel Prakken, chairman of Macroeconomic Advisers, which compiles the reports with ADP. "If you look at the details, you'll see another big decline in construction employment and manufacturing employment. That has been offset by an increase among small firms, especially in service, but the numbers are much weaker than a year ago, even for the service economy."

He expects to see employment decline further through the end of the year, but the forecasts could change, depending on the statistics that the federal government will release this week on gross domestic product and employment. "I think we'll skirt recession, but it's a nerve-wracking call for an economic forecaster," said Prakken.

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