Private Firms Added 177K Jobs in August; Economy Nears Full Employment

Private sector employment increased by 177,000 jobs from July to August, according to the August ADP National Employment Report.

Small and medium-sized businesses were responsible for more than 100,000 of the new hires.

Professional and business firms accounted for more than 50,000 of the jobs while financial firms created about 15,000 of them.

The ADP National Employment Report is produced by the ADP Research Institute in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data of 411,oo0 U.S. clients with 24 million workers, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

ADP also increased its estimate of jobs added in July from 179,000 to 194,000.

“Job growth in August was stable and consistent with levels from previous months as consumer conditions improve,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute. “Continued strong growth in service-providing jobs is offset by weakness in goods-producing areas.”

“The American job machine continues to hum along,” said Mark Zandi, chief economist of Moody’s Analytics. “Job creation remains strong, with most industries and companies of all sizes adding solidly to their payrolls. The U.S. economy will soon be at full employment.”

Payrolls for businesses with 49 or fewer employees increased by 63,000 jobs in August, down from 68,000 in July. Employment at companies with 50-499 employees increased by 44,000 jobs, down from last month’s 71,000. Employment at large companies – those with 500 or more employees – increased by 70,000, up from July’s 56,000. Companies with 500-999 employees added 25,000 and companies with more than 1,000 employees added 46,000 in August.

Goods-producing employment was down by 6,000 jobs in August, following July losses of 5,000. The construction industry lost 2,000 jobs, following July losses of 5,000 jobs. Meanwhile, manufacturing jobs were flat in August, after gaining 5,000 in the previous month.

Service-providing employment rose by 183,000 jobs in August, fewer than July’s 199,000 jobs. The ADP National Employment Report indicates that professional/business services contributed 53,000 jobs, down from July’s 70,000. Trade/transportation/utilities increased by 26,000 jobs in August, down from 31,000 jobs added the previous month. Financial activities added 15,000 jobs, up from last month’s gain of 13,000 jobs.