ADP: Manufacturing Employment Was Unchanged in August

ADP said that manufacturing employment was unchanged in August after rising in July for the first time in six months. Overall, hiring in the sector has been challenged so far this year, with employment down by 33,000 workers through the first eight months of 2016. This suggests that manufacturers have been wary about adding to their workforce in light of ongoing global headwinds and sluggish growth in demand and production. Recent data have suggested some improvements in activity for U.S. manufacturers, and hopefully, this will translate into increased hiring moving forward for the sector.

Meanwhile, nonfarm payroll employment rose by 177,000 in August, slowing somewhat from the 194,000 gain observed in July. This was mostly in-line with consensus expectations. The year-to-date average is currently 184,000, easing somewhat from the average pace of 207,000 per month seen in all of 2015. In August, the largest job gains were in professional and business services (up 53,000), trade, transportation and utilities (up 26,000) and financial activities (up 15,000). Construction employment was lower for the third straight month, down by 2,000 in August. Small and medium-sized businesses (e.g., those with less than 500 employees) accounted for more than 60 percent of all net new workers in the month.

On Friday, we will get new jobs data from the Bureau of Labor Statistics (BLS) for August, and the consensus estimate is for around 175,000 new nonfarm payroll jobs for the month. Manufacturing employment is expected to remain soft, hopefully with a slight increase for the third consecutive month.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM) and the Director of the Center for Manufacturing Research for The Manufacturing Institute, where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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