Automatic Data Processing (ADP) reported that total employment in July rose by 114,000, but manufacturing employment fell by 1,000. Given many of the weaknesses seen in recent surveys of manufacturers, the decline in employment should not be a surprise. It also mirrors many of these other indicators, with the employment rebound of June being offset in July.
The bulk of job creation in the month of July stemmed from small and medium-sized businesses, with 58,000 jobs being added by establishments with less than 50 employees and another 47,000 from those with 50 to 499 employees. The goods-producing sector lost 7,000 workers.
These numbers indicate modest growth in employment for the overall economy, but not enough to make a substantial dent in the unemployment rate. For manufacturers, it reflects many of the challenges that these firms have faced since March.
Looking ahead, it will be important for job growth to pick up for the manufacturing sector, particularly if the economy is to improve in the second half. Recent Federal Reserve Bank and other regional surveys have indicated an expectation of higher employment for the next six months, but those growth expectations have diminished somewhat from earlier in the year.
All of this leads us to the official numbers from the Bureau of Labor Statistics, which will be released on Friday. I would expect a similar result in terms of employment growth, both for total non-farm workers and for those in the manufacturing sector, as was seen in the ADP numbers released today.
Chad Moutray is chief economist, National Association of Manufacturers.
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