Upbeat NFP Growth Expected
It won’t be long before the U.S. Labor Department publishes its July NFP (nonfarm payrolls) report – arguably the most talked about data release of the month. There’s plenty of reason to believe that the world’s largest economy maintained its robust hiring pace last month, as evidenced by the recent ADP employment report.
ADP NFP Numbers Show Steady Growth in Private Sector Jobs
Private sector employers added 178,000 workers to payrolls last month, the ADP Research Institute reported Wednesday. While smaller than the 187,000 projected, it followed an upwardly revised gain of 191,000. That was well ahead of the initial estimate, which showed an increase of 158,000.
Small businesses – defined as establishments with 49 or fewer employees – hired 50,000 workers last month. In terms of sectors, the gains were driven almost entirely by services. The sector added 174,000 workers, with all sub-industries reporting growth.
Goods producers added a mere 4,000 positions, with manufacturing shedding the same number.
This is what Mark Zandi of Moody’s Analytics had to say about the ADP numbers:
“The American job machine continues to operate in high gear. Job gains are broad-based across industries and company sizes, with only manufacturers reducing their payrolls. At this pace of job growth, unemployment will continue to quickly decline.â€[1]
The ADP report draws from a slightly narrower universe than the official nonfarm payrolls data. However, it is considered an accurate guidepost for the official jobs numbers.
July NFP: What the Economists Are Saying
Economists are projecting a net increase of 178,000 nonfarm workers in July, according to a median estimate published by Bloomberg. The consensus range is between 144,000 and 220,000. Job creation outpaced forecasts in June, with employers adding 222,000 positions.
The unemployment rate is projected to fall to 4.3% in July from 4.4% the previous month. Average hourly earnings, which are used to gauge inflationary pressures, are forecast to rise 0.3% on month and 2.5% over year-ago levels.
