Businesses added 218,000 jobs in July, payroll processor ADP said Wednesday, possibly signaling that the government this week will report yet another month of strong employment gains. That makes July the fourth straight month of private-sector gains above 200,000 but it’s fewer than June’s 281,000.
Even so, the new numbers add to evidence of the job market’s steady improvement, said Moody’s Analytics chief economist Mark Zandi, whose firm helps ADP compile its report. “At the current pace of job growth unemployment will quickly decline. Layoffs are still receding and hiring and job openings are picking up. If current trends continue, the economy will return to full employment by late 2016,” he said.
ADP’s report came minutes before the Commerce Department announced the economy grew at an seasonally adjusted annual pace of 4% in the second quarter, better than economists expected, after a first quarter contraction that was the worst in five years. Economists had estimated ADP would report 230,000 new private sector jobs. They expect the Labor Department on Friday to tally a similar number of payroll additions in its more closely watched survey, which includes businesses and federal, state and local governments.
While the two reports capture similar trends, ADP’s totals have differed from Labor’s private-sector job count by an average of 37,000 a month since Moody’s Analytics began working with ADP to compile the data in 2012, according to High Frequency Economics. Labor reported 288,000 job gains last month and an average 231,000 in the first half of the year, up from 194,000 in 2013, despite mixed economic news in recent months. ADP’s report showed medium-sized businesses, those with 50-499 employees, led the way in hiring with 92,000 more jobs. Small businesses added 84,000 and big businesses had 41,000.