U.S. companies add a solid 177,000 new jobs, ADP says
Private-sector employers added 177,000 net new jobs in August, payroll processing firm Automatic Data Processing said Wednesday, signaling that the labor market is continuing the steady growth that could soon lead to a Federal Reserve interest rate hike.
The figure was down from an upwardly revised 194,000 net new jobs added in July by U.S. companies, ADP said. But the August total was in line with analyst expectations and pointed to another solid jobs report from the Labor Department on Friday.
“The American job machine continues to hum along,” said Mark Zandi, chief economist at Moody’s Analytics, which assists ADP in preparing the report.
“Job creation remains strong, with most industries and companies of all sizes adding solidly to their payrolls,” he said. “The U.S. economy will soon be at full employment.”
Business and professional services were the main drivers of private-sector job growth in August, increasing their payrolls by 53,000, ADP said.
But two important sectors continued to show weakness. Construction companies shed 2,000 net jobs, better than the 5,000 lost in July but still the third-straight monthly decline.
And manufacturing payrolls were unchanged in August. The sector had added 5,000 net new jobs the previous month, the first gain since January.
Fed Chairwoman Janet L. Yellen said last week that “continued solid performance” by the labor market was a major reason why the case for another small increase in the central bank’s benchmark interest rate had “strengthened in recent months.”
Friday’s Labor Department jobs report is the last major piece of economic data before monetary policymakers meet Sept. 20-21 to decide whether to nudge up the federal funds rate for the first time since December.
The ADP report is viewed as a harbinger of the Labor Department report, and the new data reinforced economists’ expectations that Friday’s jobs report would show U.S. private- and public-sector employers added 180,000 net new positions in August.
That would be down from a strong 255,000 the previous month, but could be enough for Fed policymakers to enact a small interest rate increase.
The unemployment rate is forecast to have ticked down to 4.8% in August, near a nine-year low.
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