The private sector created 374,000 jobs in August
Private sector employers created 374,000 jobs last month, according to payroll giant ADP reported On Tuesday, as the economy showed continued signs of recovery, although the Delta variant hampered the creation of new jobs.
Small businesses created 86,000 jobs in August, including 25,000 in businesses with 1 to 19 employees and 61,000 in businesses with 20 to 49 employees. Medium-sized businesses with between 50 and 499 employees gained 149,000 jobs in August. Large companies created 138,000 jobs, including 41,000 in companies with 500 to 999 employees and 96,000 in companies with 1,000 or more employees.
The goods-producing sector created 45,000 jobs in August, including 30,000 in the construction industry, 9,000 in natural resources and mining and 6,000 in manufacturing. The service sector gained 329,000 jobs in August, including 19,000 in professional and business services such as accounting, auditing and tax preparation, and 13,000 in financial activities such as banking. Franchises added 52,300 jobs in August.
However, the news was not all good. ADP data points to a slowing labor market recovery, with a drop in new hires, after significant employment growth in the first half of 2021.
“Our latest report suggests that the labor market recovery has slowed,” ADP chief economist Nela Richardson said in a conference call Wednesday with reporters.
She noted that ADP’s model regularly adjusts data in its National Employment Report for seasonal declines and subsequent revisions by the United States Bureau of Labor Statistics of the original release of employment figures for the United States. August, which should be released on Friday.
“Even with this technical adjustment in mind, the final estimated job gains for August will likely be lower than the rapid average monthly hiring pace we’ve seen since January of this year,” Richardson added. “Despite the slowdown, job gains are approaching 4 million in 2021, although the private sector wage bill is still around 20 million jobs below pre-COVID-19 levels. The variability of job gains has narrowed in recent times, with small, medium and large enterprises developing mainly in parallel. “
The Delta variant was a major depressing factor in hiring. “Service providers continue to do the heavy lifting, adding the lion’s share of posts in August, although this sector in general, and leisure and hospitality in particular, is expected to post the most gains in 2021,” Richardson said. “The US economy faces increasingly headwinds as the pandemic sets in and the Delta variant creates uncertainty. Companies seek to hire staff quickly, but also struggle to fill positions as quickly as they want. Many labor supply issues will resolve in the coming months, but downside risks persist until the Delta variant is better controlled. “
It also sees a decline in consumer confidence in the economy since the start of the year, affecting restaurant reservations and air travel. On the positive side, there is a strong demand in the job market. “The most recent data shows that job vacancies remain at record levels as companies seek to hire staff to meet ever-growing demand,” said Richardson. “In addition, jobless claims continue to improve and are near the lowest level since the start of the pandemic.”