U.S. Private Sector Employment Rose By 91,000 Jobs In August

(RTTNews) - Employment in U.S. private sector saw continued growth in the month of August, according to a report released by payroll processor Automatic Data Processing, Inc. (ADP) on Wednesday, although the pace of job growth fell short of economist estimates.

The report said that private sector employment rose by 91,000 jobs in August following a downwardly revised increase of 109,000 jobs in July. Economists had expected employment to increase by about 110,000 jobs compared to the addition of 114,000 jobs originally reported for the previous month.

ADP said that the data suggests that the trend in employment moderated somewhat in August, at a pace below what would be consistent with a stable unemployment rate.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "A sub 100,000 gain would normally be considered weak but, as things stand now, it will be greeted with a sigh of relief that firms didn't respond to the danger of a Federal government default and the turmoil in stock markets by putting all hiring plans on hold."

The report showed that the private sector job growth in August was largely due to an increase in employment in the service-providing sector, which rose by 80,000 jobs. The increase marked the twentieth consecutive month of job growth in the sector.

Employment in the goods-producing sector increased by a more modest 11,000 jobs in August, with the job growth in the sector partly offset by the loss of 4,000 manufacturing jobs.

At the same time, ADP said employment in the construction industry rose by 7,000 jobs in August following three consecutive monthly declines.

The report also showed that the bulk of the job growth in August remained at small and medium-size businesses, which added 58,000 jobs and 30,000 jobs, respectively. Meanwhile, large businesses created only 3,000 jobs.

Ashworth said, "The non-farm payrolls figure, due for release on Friday, is still likely to be a bit weaker because it will be affected by the strike by 45,000 Verizon workers last month."

"The ADP survey counts people as employed as long as they were on the payroll, whereas the official payroll survey only counts people as employed if they were paid during their normal pay period that includes the 12th of the month," he added.

The Labor Department's closely watched monthly employment report is currently expected to show an increase of about 67,000 jobs in August following the addition of 117,000 jobs in July. The unemployment rate is expected to remain unchanged at 9.1 percent.

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