ROSELAND, N.J. – U.S. companies added 9,000 jobs to their payrolls in July, after eliminating a revised 77,000 jobs in June, according to a monthly survey released today by ADP Employment Services.
But, the company warned, “though July’s figures showed a slight employment gain, the ADP Report’s recent three-month average of negative 14,000 suggests that the weakened employment situation continues.” Analysts had expected a loss of 60,000 non-farm jobs would follow the originally reported June decline of 79,000, according to the median estimate of 29 economists surveyed by Bloomberg News.
“This month’s employment gain was driven by growth in the service-providing sector, which advanced 74,000,” ADP said, after losing ground last month for the first time since November. (READ MORE)
The goods-producing sector lost 65,000 jobs this month in its 20th consecutive monthly decline, ADP said. Manufacturing employment fell by 49,000 in its 23rd consecutive decline.
But two hard-hit sectors – residential construction and financial activities related to home sales and mortgage lending – showed signs of “some lessening of the recent strain,” the report said. Construction employment fell 16,000 last month, after falling 34,000 the month before. “Though this was the 20th consecutive monthly decline – and brings the total decline in construction jobs since the peak in August of 2006 to 350,000 – it was one of the smallest declines in recent months,” ADP noted. And financial activities employment, which had dipped in June for the first time in three months, increased by 4,000 in July
The gains were concentrated in small companies, those with 49 or fewer workers, which added 50,000 jobs during the month. Medium-sized businesses – with 50 to 499 workers – reduced their work forces by 9,000 jobs in July. Large businesses – those employing 500 or more workers – cut 32,000 jobs from their payrolls, the survey found.
“Employers are being extremely cautious about expanding payrolls,” Joel Prakken, chairman of Macroeconomic Advisors, told Bloomberg News in a telephone interview today. “In sectors where there were excesses in payrolls, we’re still working those off.”
A federal report due Friday is expected to show that total private and government non-farm employment shrank in July for the seventh straight month, shedding 75,000 jobs, based on a Bloomberg News poll of economists. The federal report has shown a decline in payroll employment in each of the previous six months, Bloomberg noted, while the ADP payroll report has posted only two declines.
“The trend is toward lower jobs,” Roger Kubarych, chief U.S. economist at UniCredit Global Research, said in an interview with Bloomberg Television. “There is still contraction in construction jobs and manufacturing jobs – offset to a great extent, but not entirely, by the services sector and the government.”
ADP’s monthly report is prepared by Macroeconomic Advisers LLC, based on ADP payroll data from about 392,000 employers with more than 23 million workers nationwide.
ADP Employment Services – a division of Automatic Data Processing Inc.(NYSE: ADP) – handles payroll for 1 in 6 private-sector employees nationwide. For more information, including the monthly ADP National Employment Report, visit www.adp.com.
