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First Cut: ADP National Employment Report as expected for July

The ADP National Employment Report said private payrolls rose 156,000 in July, virtually the same as the median market expectation of 155,000. This will raise confidence that the July Employment Situation will also be in line with forecasts and reflect a labor market still adding jobs at a healthy pace sufficient to absorb new entrants and chip away at any remaining slack.

Payrolls were up 9,000 for goods producers in July. The increase was largely concentrated in construction (up 15,000) while manufacturing eked out a minimal gain (up 1,000) and natural resources declined (down 6,000).

Service providers were up 146,000 in July on solid gains for professional and business services (up 44,000), education and healthcare (up 37,000), trade, transportation, and utilities (up 27,000), and leisure and hospitality (up 26,000).

The six-month moving average for the total was up 158,000 in July, down from 176,000 in June and 199,000 in May. Growth in hiring seems to have lost momentum and returned to levels more typical of 2017 than 2018. Nonetheless, in the historical context and given the maturity of the expansion, these are increases that remain solid.

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