Businesses added jobs at a modest pace in August, according to a
tally of private-sector hiring released Thursday. With the number
coming in almost as forecasted, it should have little impact on
expectations for Friday's employment report that carries with it
implications on Federal Reserve policy.
Private-sector jobs in the U.S. increased by 176,000 in August,
according to a national employment report calculated by payroll
processor Automatic Data Processing Inc. (ADP) and forecasting firm
Moody's Analytics.
Economists surveyed by Dow Jones Newswires expected ADP to
report an August increase of 178,000 jobs. The July ADP employment
increase was revised to 198,000 from 200,000 reported a month
ago.
"Job gains in August were consistent with increases experienced
over the past two-plus years. There is little evidence that fiscal
austerity and Healthcare Reform have had a significant impact on
the job market," the report said.
The ADP estimate is being released ahead of the Bureau of Labor
Statistics' employment situation report scheduled for Friday. The
BLS report counts both private and government payroll slots.
According to the median forecast of economists, August nonfarm
payrolls grew by 175,000 new positions a bit better than the
162,000 jobs created in July.
The August unemployment rate is forecast to hold at 7.4%.
While the employment report is always important for economists
and investors alike, the August report carries more weight than
usual. That's because the report will be the last payrolls number
before the Federal Reserve meets Sept. 17-18.
Many Fed-watchers expect policymakers will announce a reduction
in bond purchases. A weak payrolls report, however, could shift
expectations on the Fed's upcoming action. The ADP report shouldn't
change economists' forecasts.
According to ADP, firms employing between 1-49 workers increased
jobs by 71,000 in August. Medium-sized businesses with payrolls of
50-499 workers hired 74,000 employees. Large firms, businesses with
500 or more employees, added 32,000 workers.
Service-sector jobs increased by 165,000 last month, while the
factory sector added just 5,000 positions.
Other reports covering August labor markets were mixed.
Bright.com estimates 192,000 new jobs were created in August.
The job search engine company uses its aggregation of job postings
along with government, financial, real estate, and other data
sources.
Layoff announcements, however, spiked in August. Outplacement
firm Challenger, Gray & Christmas said U.S. employers announced
job cuts totaling 50,462, up 33.8% from the number reported in July
and the highest level since February.
On Wednesday, small-business group, the National Federation of
Independent Business, said its members reported a decline in
employment averaging 0.3 worker per firm in August. The NFIB said
it was the fourth-consecutive month of declining average
payrolls.
ADP, of Roseland, N.J., offers payroll processing, human
resource and benefit administration services to about 600,000
clients worldwide. Economics firm Moody's Analytics is a subsidiary
of Moody's Corp. (MCO).
Write to Kathleen Madigan at kathleen.madigan@dowjones.com
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