ADP National Employment Report on Private Sector Job Creation Tops Forecast

The National Employment Report conducted by the payroll processing firm ADP finds 179,000 were added to private sector payrolls in July. The results top the estimate was for 170,000, while payrolls for the previous month were revised higher by 4,000 to 176,000.

“This month’s employment number falls short of the 12-month average primarily because of slowing in small business hiring,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute. “As the labor market continues to tighten, small businesses may increasingly face challenges when it comes to offering wages that can compete with larger businesses.”

Last month, the ADP employment report was far more optimistic than the Labor Department jobs report conducted by the Bureau of Labor Statistics. Still, some analysts say the numbers are cooling because the U.S. economy is reaching “full employment,” an assessment most Americans flatly reject.

“Job growth remains strong, but is moderating as the economy approaches full employment. Businesses are having a more difficult time filling open job positions, which are near record highs. The nation’s biggest economic problem will soon be the lack of available workers.”

While the debate over whether the labor market is tightening to full employment, the quality of the jobs is not in debate. In July, the economy continued to create low-wage opportunities in lower-paying industries and sectors.

Goods-producing employment was down by 6,000 jobs in July after losing 28,000 the month prior. The construction industry shed 6,000 jobs after a loss of 4,000. However, manufacturing gained roughly 4,000 jobs after losing 15,000 the previous month.

Service-providing employment, which has been essentially carrying the rest of the economy, increased by 185,000 jobs in July, down from June’s 203,000 jobs. The ADP National Employment Report indicates that professional/business services added 59,000 jobs, down from June’s 78,000. Trade/transportation/utilities increased by 27,000 jobs in July, down from 41,000 jobs added the previous month. Financial activities added 11,000 jobs, following last month’s gain of 9,000 jobs.