The U.S. economy added 179,000 private, non-farm jobs in July, according to the monthly employment report released Wednesday morning by payroll-management firm ADP and its partner Moody's Analytics. The seasonally adjusted number, which came in better than the 165,000 analyst expectations, reflected a modest increase compared to June's upward-revised gain of 176,000 jobs, and is up about 13 percent from July 2015. The result comes amid the worse-than-expected GDP growth rate of about one percent recently released by the Commerce Department, painting a mixed picture of the market.
Echoing the National Employment Report in June, ADP's forecast is more bad news for the construction industry, as the July forecast estimates that 6,000 jobs were lost in construction over the course of the month, compared to June's approximate loss of 5,000 jobs. This is the second straight month employment in construction has contracted after staying positive for over five years.
Manufacturing added 4,000 jobs during the same period, making the first gain after five months of decline. The professional and business services sector—which includes architecture and engineering firms—continued to make progress for the fourth-straight month, bringing in 59,000 new jobs in July.
About one third, or 61,000, of the total positions added in July took place at businesses with fewer than 50 employees, the first time that small businesses cool off after three months of contributing to nearly half of the payroll gain. Although today's forecast is bad news for the construction industry, Moody's Analytics chief economist Mark Zandi is pleased with the overall report.
"[This is] another month and another good number," Zandi commented in a conference call this morning. Although the 179,000 adds-on is a bit slower than the average monthly job growth of over 200,000 seen in the past six years, Zandi said it indicates that the job market is well on track and very close to full employment.
"Businesses are now having a more difficult time filling open job positions...and in fact, the number of open positions across the economy is pretty close to a record high." added Zandi, in a call."But even at the current rate of job growth, it's still well above the growth in the working age population and the labor force."
The ADP index is typically used to gauge the monthly BLS jobs report, which will release its July results Friday. Zandi forecasts that the BLS report will churn out solid numbers at about 189,000 jobs added to the U.S. economy in July.
Read the full report from ADP here >>