The ADP National Employment Report shows U.S. private sector job creation was much stronger in August than expected, adding 237,000 new jobs. That easily beats the 185,000 consensus forecast and higher-paying sectors picked up steam to confirm government data regarding wages being on the rise.
“In August, the goods-producing sector saw the best performance in months with solid increases in both construction and manufacturing,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Additionally, the trade industry pulled ahead to lead job gains across all industries, adding the most jobs it has seen since the end of 2016. This could be an industry to watch as consumer spending and wage growth improves.”
Construction added a solid 18,000 jobs in May after dipping in April by 2,000 and very strong gains in the previous two months. The goods-producing sector overall added 33,000, includes 18,000 in Construction and and 16,000 in Manufacturing. Natural Resources & Mining lost 1,000 in August.
“The job market continues to power forward. Job creation is strong across nearly all industries, company sizes,” Mark Zandi, chief economist of Moody’s Analytics, said. “Mounting labor shortages are set to get much worse. The initial BLS employment estimate is often very weak in August due to measurement problems, and is subsequently revised higher. The ADP number is not impacted by those problems.”
Small business that employ between 1 and 49 employees added a solid 48,000 jobs, while mid-size (50-499) added 74,000. Large businesses with 500 employees ore more added 115,000, boding well for wages.