The latest ADP National Employment Report came in under economists’ forecasts of 185,000 jobs added — a sign that the economy may be nearing full employment.
“The job market continues to power forward,” said Mark Zandi, chief economist at Moody’s Analytics, which produces the report with ADP. “Abstracting from the monthly ups and downs, job growth remains a stalwart between 150,000 and 200,000. At this pace, which is double the rate of labor force growth, the tight labor market will continue getting tighter.”
In addition to reflecting a tightening labor market, slower hiring “may also be a sign businesses are holding off on expansion plans until they see more evidence the new administration’s plans are translating into legislation that will reduce taxes and spur growth,” writes Patricia Laya at Bloomberg.
Where the Jobs Are
Goods-producing industries produced a net total of zero jobs last month, with manufacturing adding 6,000 jobs, but mining and construction shedding 4,000 and 2,000 jobs respectively.
Gains in service-providing industries were centered in professional/business services (+69,000 jobs), healthcare (+33,000 jobs), trade/transportation/utilities (+30,000 jobs), financial activities (+10,000 jobs), and leisure/hospitality (+11,000 jobs).
Medium-sized businesses (50-499 employees) added the most jobs last month, at 91,000. Large businesses (500+ employees) added 50,000 jobs, and small businesses (1-49 employees) added 17,000 jobs.
The State of Wage Growth
Tomorrow’s jobs report from the Labor Department will include data for public and private, non-farm payrolls. Economists polled by Reuters predict that it will show the addition of 179,000 jobs, and an unemployment rate holding steady at 4.3 percent.
The Bureau of Labor Statistics’ report will also include information on wage growth. The PayScale Index, which updated today, shows that U.S. wages grew 0.5 percent between Q1 and Q2 2017. However, real wages were flat. The buying power of workers’ wages is 7.4 percent lower today than it was in 2006.
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