Private employers accelerated their hiring in August, adding a robust 237,000 net new jobs in a sign that the labor market remains strong and should start pushing up wages.
The figures released Wednesday by payroll firm Automatic Data Processing exceeded analysts' expectations of 185,000 and were a significant improvement over an upwardly revised 201,000 net new private-sector jobs in July.
"The job market continues to power forward," said Mark Zandi, chief economist at Moody's Analytics, which assists ADP in preparing its report.
"Job creation is strong across nearly all industries [and] company sizes," he said. "Mounting labor shortages are set to get much worse."
Strong job growth this summer came after the economy grew in the second quarter more than initially estimated.
The Commerce Department said Wednesday that total economic output, also known as gross domestic product, increased at a 3% annual rate from April through June.
The first estimate, released last month, said the economy grew at a 2.6% annual rate for the period. The final estimate is coming in September.
Economists expect growth to slow somewhat in the third quarter.
With a weak first quarter, the economy grew 2.1% in the first half of the year, consistent with the sluggish pace of the recovery from the Great Recession.
The ADP report could signal that the official jobs data coming Friday from the Labor Department will surpass forecasts.
Economists are expecting that report to show that overall job growth — private and public sector — slowed somewhat to 180,000 this month, from 209,000 in July.
The unemployment rate is forecast to remain at 4.3%, the lowest since 2001.
Private-sector job growth in August was boosted by the largest increase in factory payrolls in five months, ADP said. Manufacturers added 16,000 net new jobs after shedding 1,000 in July.
Construction hiring also improved, with businesses in that sector adding 18,000 net new jobs in August, up from 11,000 the previous month.