July Job Growth Slowed

Private sector hiring slowed in July, adding 185,000 new jobs to the U.S. economy, a number well below the predictions of economists whose collective forecast was that 215,000 jobs were added.

Every industry sector tracked by HR services provider ADP and its partner, Moody’s Analytics, showed a decline from June, according to the ADP National Employment Report. Businesses with fewer than 50 workers, which have been growing jobs faster than all other businesses for months, added 59,000 in June. That’s the smallest number for those businesses since December 2013.

“Job growth is strong, but it has moderated since the beginning of the year,” said Mark Zandi, Moody’s chief economist. “Layoffs in the energy industry and weaker job gains in manufacturing are behind the slowdown. Nonetheless, even at this slower pace of growth, the labor market is fast approaching full employment.”

The Labor Department’s employment report, due out Friday, is expected to show both private employers and government added 225,000 workers to U.S. payrolls. That would be just above the average of 208,000 new jobs for the first 6 months of this year. A year ago the first 6 months averaged 252,000 new jobs monthly.

Barring a dramatic surprise in Friday’s report, the Federal Reserve is poised to raise interest rates next month for the first in almost 10 years. Besides job creation, the Fed’s Board is also watching other labor market indicators such as the unemployment rate (expected to remain at 5.3%), wage growth and the labor force participation rate.

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In another report Wednesday, the Institute for Supply Management said its service sector index of new orders stood at 63.8% in July, its highest since August 2005. The ISM’s overall non-manufacturing index registered 60.3%, a 4.3 point increase over June.  A reading above 50 percent indicates the non-manufacturing sector economy is generally expanding.

Service sector employment also reached a ten year high, coming in at 59.6%, a jump of 6.9 percentage points over June.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.