The U.S. economy added 177,000 private, non-farm jobs in August, according to the monthly employment report released today by payroll-management firm ADP and its partner Moody's Analytics. The seasonally adjusted number reflects a modest decrease from July's upward-revised gain of 194,000 jobs, and marks a nearly 12 percent drop from August 2015, when 201,000 new jobs were added. Moody's Analytics chief economist Mark Zandi remains bullish about employment and the economy overall, however.
"The market is sturdy and strong, and the rate of job creation is very good," Zandi said in a conference call this morning. "Unemployment and underemployment continue to decline—the economy is not quite at full employment, but we're pretty close."
More than one-third (63,000) of the payroll additions in August occurred at businesses with fewer than 50 employees, a figure on par with previous months. Within that figure, firms employing fewer than 20 individuals accounted for roughly four in 10 (24,000) of those additions. This represents a "noticeable acceleration" in the number of new small businesses, Zandi said, a promising sign of post-recession recovery.
For the third consecutive month, employment in the construction sector contracted, with 2,000 jobs lost in August. Manufacturing employment was flat, and the professional and business services sector—which includes architecture and engineering firms—continued to add jobs, netting 53,000 payroll positions during the same period.
The August numbers come after the Federal Reserve's 2016 Economic Symposium in Jackson Hole, Wyo., this past weekend, when chair Janet Yellen suggested the possibility of an interest rate hike this fall.
"The labor market is eerily calm, so there seems to be less risk in doing that," Zandi said. However, he anticipates that the Fed will not raise rates to avoid the possibility of stifling economic recovery.
The ADP index is typically used to gauge the monthly Bureau of Labor Statistics Employment Situation report, which will release its August results on Friday, Sept. 2.
For more information, read the full employment report from ADP.