U.S. Private Sector Adds More Jobs Than Expected In July

(RTTNews) - Ahead of the release of the Labor Department's more closely watched monthly jobs report on Friday, payroll processor ADP released a report on Wednesday showing that U.S. private sector employment rose by a little more than expected in the month of July.

ADP said private sector employment increased by 179,000 jobs in July after climbing by an upwardly revised 176,000 jobs in June.

Economists had expected employment to grow by about 170,000 jobs compared to the addition of 172,000 jobs originally reported for the previous month.

"Job growth remains strong, but is moderating as the economy approaches full employment," said Mark Zandi, chief economist of Moody's Analytics.

"Businesses are having a more difficult time filling open job positions, which are near record highs," he added. "The nation's biggest economic problem will soon be the lack of available workers."

The bigger than expected increase in private sector jobs primarily reflected strength in the service-providing sector, which added 185,000 jobs in July following an increase of 203,000 jobs in June.

The professional/business services industry contributed 59,000 jobs, while employment in the trade/transportation/utilities industry rose by 27,000 jobs.

On the other hand, the report said goods-producing employment edged down by 6,000 jobs in July following the loss of 28,000 jobs in June.

The drop in goods-producing employment came as the loss of 6,000 construction jobs more than offset an uptick of 4,000 manufacturing jobs.

ADP also said employment at large businesses climbed by 50,000 jobs, while small and medium businesses added 61,000 jobs and 68,000 jobs, respectively.

"This month's employment number falls short of the 12-month average primarily because of slowing in small business hiring," said Ahu Yildirmaz, vice president and head of the ADP Research Institute.

She added, "As the labor market continues to tighten, small businesses may increasingly face challenges when it comes to offering wages that can compete with larger businesses."

Friday morning, the Labor Department is scheduled to release its monthly employment report, which includes both public and private sector jobs.

The report is expected to show an increase of about 185,000 jobs in July after employment jumped by 287,000 jobs in June. The unemployment rate is expected to edge down to 4.8 percent from 4.9 percent.