The U.S. economy added 179,000 private, non-farm jobs in July, according to the monthly employment report released today by payroll-management firm ADP and its partner Moody's Analytics. The seasonally adjusted number, which comes in ahead of analyst expectations, reflects a modest increase from June's upward-revised gain of 176,000 jobs and is a 13-percent increase from July 2015.
"(This is) another month and another good number," Moody's Analytics chief economist Mark Zandi said in a conference call this morning. Although July's number falls below the average of 200,000 jobs added monthly over the course of the past six years, Zandi said that's largely because the market is nearing 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."
Roughly one-third, or 61,000, of the payroll additions in July took place at businesses with fewer than 50 employees, a figure on par with previous months.
The construction sector shed 6,000 jobs in July, the second-straight month of contractions following more than five years of monthly payroll gains. Manufacturing added 4,000 jobs during the period, reversing its five-month trend of decline. And the professional and business services sector—which includes architecture and engineering firms—continued to add jobs, netting 59,000 payroll positions in July.
The July numbers come amid slow GDP growth, the result of factors including low oil prices, painting a mixed picture of the market. "What's going on in the labor market does suggest that the Federal Reserve needs to begin normalizing interest rates in a more consistent way," Zandi said. "My sense is they'll feel comfortable enough to begin raising rates again at the end of this year, and I would expect a series of interest rate hikes as we move into 2017 and 2018."
The ADP index is typically used to gauge the monthly Bureau of Labor Statistics Employment Situation report, which will release its July results on Friday. Zandi forecasts that the BLS will report the addition of roughly 189,000 jobs in July.
