In August 176,000 private sector jobs were added to the economy according to the ADP Employment Report released Thursday. The August numbers were down slightly from the 178,000 jobs created in July. Now that final figures have been compiled, the July numbers were revised downward from the 200,000 which were reported last month.
For the first time in a while, most gains were in medium-sized businesses that employ between 50 and 499 workers. That sector added 74,000 jobs edging out small businesses that added 71,000. Generally small businesses have been adding the most jobs. Large companies with over 500 workers added 32,000 workers and most of these were in companies with over 1,000 employees.
As is always the case in our service based economy, the vast majority of jobs were in the service sector which accounted for 165,000 of the 176,000 new jobs. Service jobs were down slightly from July. The goods producing sector added only 11,000. This was down by 50% from last month.
Manufacturing, however, did add 5,000 workers in August after showing a decline in July. Construction was also up with 4,000 new employees added. Professional business services saw the most growth adding 50,000 employees, followed by trade, transportation and utilities.
The ADP Report is produced by ADP, a payroll services company in conjunction with Moody’s Analytics. It does not take government jobs into account, nor does it calculate things like the unemployment rate or participation in the work force. That is done by the Bureau of Labor Statistics (BLS) which will release its “official” jobs report Friday.
ADP derives its information from actual, anonymous payroll data covering 24 million workers in client companies served by ADP®. The report, which measures nearly 24 million U.S. workers, is produced by the ADP Research Institute®, a specialized group within the company that provides insights around employment trends and workforce strategy, in collaboration with Moody’s Analytics, Inc.
Carlos A. Rodriguez, president and chief executive officer of ADP said that the August numbers were in line with the monthly gain over the last year.
"The U.S. private sector added 176,000 jobs in August, as companies of all sizes expanded their payrolls over the previous month," said. “The August job gains are in line with the monthly average over the last 12 months,” Rodriquez said.
Mark Zandi, chief economist of Moody’s Analytics, said, "It is steady as she goes in the job market. Job gains in August were consistent with increases experienced over the past two-plus years. There is little evidence that fiscal austerity and Health Care Reform have had a significant impact on the job market.”
The fiscal austerity program also known as the sequester will likely show up in government employment which is measured by the BLS.
Economists say it takes about 150,000 jobs to account for population growth, so anything above that will bring down the unemployment rate. If unemployment is to drop significantly, there needs to be over 250,000 jobs added a month. So the economy is growing, but slowly.
Friday we will see what the “official” jobs report says.