Private Sector Jobs Grow More Slowly in August

ADP Aug 2013 jobs chartPrivate sector hiring slowed in August, off by 11 percent from July’s revised 198,000 new jobs, but still ahead of the 166,000 average of the last 12 months.

ADP’s payroll based count of August’s hiring by private companies came in at 176,000, below the average of what economists were expecting. A Bloomberg survey predicted the report would come in at 184,000 new jobs. A Reuters survey put the number at 180,000.

Although off from the estimates, ADP’s National Employment Report was offset by lower than expected unemployment filings last week, which came in at 332,000, a five-year low. The Institute for Supply Management also turned in a strong report. The ISM said its services index rose to 58.6, the highest since December 2005 and above even the most optimistic of estimates in a Reuters survey. A reading above 50 indicates expansion.

ADP’s report, compiled by Moody’s Analytics, said the service sector accounted for all but 11,000 of the new jobs in August. According to the report, the industry gainers were:

  • Construction 4,000
  • Manufacturing 5,000
  • Trade/transportation/utilities 40,000
  • Financial activities 1,000
  • Professional/business services 50,000

Hiring in the highly seasonal construction industry was off significantly from June (+18,000) and July (+21,000). Manufacturing, though, was a significant improvement from July’s 3,000 job loss.

ADP Aug 2013 jobs by co sizeSHRM’s LINE report predicted that hiring in the manufacturing sector would be strong in August, and that service-sector hiring would continue largely as it has. For September, SHRM’s Leading Indicators of National Employment report predicts manufacturing hiring will be off slightly from a year ago, while service sector will be up significantly over last year.

Compared to the prior month, September’s hiring will look a lot like August, though a little softer in manufacturing.

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That’s consistent with what economists are saying.

“It is steady as she goes in the job market,” says Mark Zandi, chief economist of Moody’s Analytics. “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.”

Tomorrow, the government issues its monthly jobs and employment report. The U.S. Bureau of Labor Statistics, which compiles the data, includes both the private sector and government. It uses surveys to estimate both the nation’s total jobs, and unemployment rates and other related statistics.

Surveys by the business media show that the average estimates of economists are that the government will report about 180,000 total new jobs in August and no change in the nation’s 7.4 percent unemployment rate.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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