Strong July Jobs Report From ADP Points to Even Better Government Numbers

Change in employment July 2013 adpThe summer of 2013 is turning out to the best in years for the U.S. economy as more jobs have so far been added in June and July than in any of the years since the start of the recession.

With the news this morning from ADP and its data analysis partner Moody’s Analytics that the private sector added 200,000 in July and that June’s hiring was 10,000 better than initially reported, the total new jobs created in the last 60 days is 398,000.

July’s strong showing surprised many economists who, in a Dow Jones survey, collectively were predicting the private sector added 183,000 jobs.

“Job growth remains remarkably stable. Businesses are adding to payrolls in most industries and across all company sizes,” said Mark Zandi, chief economist for Moody’s Analytics. “The job market has admirably weathered the fiscal headwinds, tax increases, and government spending cuts. This bodes well for the next year when those headwinds are set to fade.”

The ADP National Employment Report is one of two key jobs reports that will be issued this week. The government’s official count of workers, jobs, and unemployment will be released Friday.  The median prediction in the Dow Jones survey puts the Labor Department’s count of non-farm private and public sector new jobs at 183,000. June’s 7.6 percent unemployment rate is predicted to come down to 7.5 percent. A MarketWatch survey predicts the official count will come in at 175,000.

Economists and Wall Street closely watch the monthly ADP report for clues about what the Labor Department’s report might show. The numbers, however, rarely synch. Moody’s crunches payroll data provided by ADP, which processes payrolls for some 24 million workers at several hundred thousand businesses. The U.S. Bureau of Labor Statistics, which compiles the government’s monthly employment snapshot, uses mailed surveys.

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Over the last 12 months, ADP typically has reported fewer new jobs than has the Labor Department. The average difference is 32,000. If it holds true for July, then the government’s report could show as many as 230,000 to 240,000 new jobs.

ADP July 2013 business growthSmall and mid-size businesses accounted for 142,000 of the new July jobs, according to the ADP report. The smallest businesses — fewer than 20 workers — hired 51,000 new workers. The largest, those with more than 1,000 employees, added 50,000, which is one of the strongest hiring pushes by large employers since November when they added 83,000 jobs. However, many of those were seasonal help who were laid off in January.

All but 22,000 of the new jobs were in the service sector. The biggest gainers were the professional/business sector, which added 49,000 jobs, and trade/transportation/utilities, with a gain of 45,000. Construction added 22,000 jobs, another sign of a rebounding economy. Manufacturing lost 5,000.

In another positive sign, the Commerce Department reported this morning the economy grew 1.7 percent in the second quarter. A MarketWatch survey of economists put the average of their estimates at 1 percent. Though better than expected, the growth is still sluggish by historical standards. At the same time, the government revised down its initial 1.8 percent growth estimate to 1.1 percent. The revision reflected a change in the government’s method of calculating GDP.

John Zappe is the editor of and a contributing editor of 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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