ADP Report Shows 195,000 Payrolls Added in August
Although fears of a recession have been in discussion for the better part of a year or more, that talk has heated up in recent weeks. From trade wars to inverted curves, there have been reasons to worry, leading The New York Federal Reserve to peg the chances that a recession hits in the next 12 months at 39% (according to CNBC). At the same time, as a new report from ADP shows, U.S. businesses continue to add jobs.
ADP’s latest release shows private payrolls growing by 195,000 in August. That not only bests the 140,000 that economists surveyed by Dow Jones had expected but also topped last month’s 142,000. In fact it was the best month for private payrolls since April when 255,000 jobs were added.
Unlike the jobs report that the Labor Department releases each month, ADP also looks at payrolls by business size. Leading the way in August were midsized businesses (50 to 499 employees), which added 77,000 payrolls. Meanwhile small business with fewer than 50 employees created 66,000 jobs with big businesses accounting for the other 52,000. Also interesting is that the service sector’s gains far exceeded goods and production 184,000 to just 11,000. The top vertical overall was education and health with 58,000 followed by leisure and hospitality (42,0oo) and trade, transportation, and utilities (39,000).
Asked by CNBC what ADP’s report signals for the economy at large, Moody’s chief economist Mark Zandi said, “Businesses are holding firm on their payrolls despite the slowing economy. Hiring has moderated, but layoffs remain low.” He went on to say, “As long as this continues recession will remain at bay.” Of course there’s still a question as to what the Labor Department’s official report will reveal. On that note, although Capital Economics U.S. economist Paul Ashworth told CNBC that job growth “remains in relatively good shape,” he anticipates the August job reports to show a figure closer to 110,000.
At this point the constent discussion of a potential recession may be old hat. But, with the longest expansion period in U.S. history still going, these talks are really just par for the course. That said it seems for every sign of danger that flashes, another reassuring signal follows — such is the case with ADP’s August payrolls report. So while analysts will continue to pour over data and indicators, for the time being, things appear to be ok.