Economic Snapshot: ADP employment adds 185,000 jobs in July

Private sector employment has returned to trends we saw earlier this year, with job growth dropping below 200,000 in July. However, this month was a huge improvement for employment in large businesses.

ADP employment

Private sector employment increased by 185,000 jobs in July, a sharp decline from the 229,000 jobs added in June.

Breaking recent trends, large businesses added the most jobs in July at 64,000, up sharply from 34,000 the previous month and the strongest gains since December 2014. Medium-sized businesses were not far behind, with 62,000 jobs added in July. Small businesses added 59,000 jobs, half the number of the payroll added in June.

The service-providing sector led the way in employment growth this month. Within the sector, professional & business added 42,000 jobs while trade, transportation & utilities added 25,000 jobs, just over half of the 47,000 jobs added in June. Financial activities added 10,000 jobs in July.

Goods-producing employment added 8,000 jobs in July, after adding 13,000 in June. The construction industry added 15,000 jobs in July while manufacturing added 2,000 jobs.

ISM non-manufacturing

The ISM Non-Manufacturing Index rose 4.3 percentage points to 60.3 in July. This represents continued growth in the non-manufacturing sector at a faster rate. Economic activity in the non-manufacturing sector grew in July for the 66th consecutive month.

The Business Activity Index jumped 3.4 percentage points to 64.9 percent, reflecting growth for the 72nd consecutive month at a faster rate. The New Orders Index rose 5.5 percentage points to 63.8 percent.

The Employment Index climbed 6.9 percentage points to 59.6 percent in July, indicating growth for the 17th consecutive month.

The Prices Index increased 0.7 percentage points to 53.7 percent, indicating prices increased for the fifth consecutive month.

Fifteen of the 18 non-manufacturing industries reported growth in July, with Arts, Entertainment & Recreation leading the way once again. The two industries reporting contraction are Mining and Other Services.

ISM manufacturing

The ISM Manufacturing Index registered at 52.7 percent in July, which is a 0.8 percent decrease from the June reading. Economic activity in the manufacturing sector expanded for the 31st consecutive month in July and the overall economy grew for the 74th consecutive month.

The New Orders Index increased 0.5 percentage points to 56.5 and the Production Index rose 2.0 percentage points to 56 percent in July.

The Employment Index dropped 2.8 percentage points to 52.7 in July, which reflects growing employment levels at a slower rate.

Inventories of raw materials fell 3.5 percentage points to 49.5 percent in July and the Prices Index dropped 5.5 percentage points to 44 percent. This indicates lower raw materials prices for the ninth consecutive month.

Eleven of the 18 manufacturing industries reported growth in July. The five industries reporting contraction in July are: Wood Products; Primary Metals; Plastics & Rubber Products; Chemical Products; and Machinery.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button