ADP reported that manufacturing employment declined by 4,000 in July, declining for the first time since November. Overall, the sector has added 98,000 net new workers year-to-date. Despite the weaker data in this report, manufacturers have noted better employment growth this year than last, with employers accelerating their hiring in light of stronger activity and sentiment. In contrast, hiring in 2016 was flat for the year as a whole. With that in mind, we are hopeful that the trend of stronger job growth returns in the coming months.
Meanwhile, total private employment increased by 178,000 in July, pulling back somewhat from the 191,000 workers added in June but mostly in-line with consensus expectations. Nonfarm private payrolls have risen by 217,458 per month on average, which was notably higher than the 179,327 workers added each month in the second half of 2016. As such, the labor market has strengthened year-to-date, which is promising. The largest employment growth in July included professional and business services (up 65,000), education and health services (up 43,000), trade, transportation and utilities (up 24,000), leisure and hospitality (up 15,000) and financial activities (up 13,000). Small and medium-sized businesses (i.e., those with fewer than 500 employees) accounted for nearly three-quarters of all net new workers in July. Read More