With the midterm narrative hanging in the balance, the August jobs report released tomorrow may set the tone for the general election campaigns over the next ten weeks. ADP’s private-sector survey suggests that the level of job creation will remain steady, as they show a slight decline from the levels over the last two months at 204,000 jobs added in August. If that holds up in tomorrow’s report, it will keep pace with population growth, but not much else:
Private sector employment increased by 204,000 jobs from July to August according to the AugustADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.
Goods-producing employment rose by 41,000 jobs in August, up from 23,000 jobs gained in July. The construction industry added 15,000 jobs over the month, slightly above last month’s gain. Meanwhile, manufacturing added 23,000 jobs in August, the highest total in that sector since December 2012.
Service-providing employment rose by 164,000 jobs in August, down from 190,000 in July. TheADP National Employment Report indicates that professional/business services contributed 51,000 jobs in August, down from 60,000 in July. Expansion in trade/transportation/utilities grew by 28,000, down from July’s 43,000. The 5,000 new jobs added in financial activities was down almost half from last month’s number.
“August marks the fifth straight month of employment gains above 200,000, continuing an encouraging trend for the U.S. labor market,” said Carlos Rodriguez, president and chief executive officer of ADP.
Even so, it’s the lowest level in the past five months, and significantly down from the big addition in June. ADP’s chart shows that, apart from the June outlier, job growth has been remarkably steady at just above water-treading level in 2014:
Bloomberg called this a miss, even though it falls within the 2014 range rather well. So did Investing.com, which expected a rise to 220,000 this month. This result “dampen[s] optimism over the strength of the US labor market,” according to its house analysis. CNBC also noted the miss in a more positive take:
Private sector job creation slowed a touch in August, missing expectations though roughly maintaining the pace of expansion so far in 2014.
A report from ADP and Moody’s Analytics showed employment growth of 204,000 positions, off a touch from the downwardly revised 212,000 in July and well off the 297,000 in June. Economists surveyed by Reuters had expected the report to show 220,000 new positions. …
One highlight of the report was manufacturing, which gained 23,000, the best for that sector since December 2012.
Forbes warns that small-business hiring has taken a cooling trend in another payroll-service survey:
On Tuesday Paychex, another payroll provider that specializes in small scale employers, released its monthly Paychex | IHS Small Business Jobs Index. The index looks at changes in rate of worker growth at 350,000 companies. Each business in the sample group has fewer than 50 employees and 80% have fewer than 20.
On a national basis the index decreased slightly in August to 100.99 from 101.11 in July, the slip marks third month on declines in the last for but comes off of a sharp record high in April. The barometer has increased 0.2% in the last 12-months, meaning the growth is picking up modestly.
Their index shows that August was the lowest month in 2014 for small-business hiring, but it’s still above what Paychex showed for the second half of 2013.
The hiring data in these reports don’t give any indication that Americans will have a sharply different attitude toward the economy as they begin to pay attention to the midterm elections. There is still room for that to change, with tomorrow’s actual BLS report and the reports in October for hiring and for Q3 economic expansion that will come just days before the election itself. The just-above-stagnation levels of the past few years looks to continue for a while longer.