Private sector adds 195K jobs in August, beating expectations: ADP

Private sector adds 195K jobs in August, beating expectations: ADP
© Getty Images

U.S. businesses added 195,000 jobs last month, according to the ADP National Employment report released Thursday, exceeding expectations amid concerns of a possible recession in 2020.

Despite slowing economic growth and the escalating cost of global trade tensions, private sector payrolls gained well more than the 145,000 workers that economists had projected for August.

“It suggests that if nothing goes off the rails, we should be in pretty good shape and the expansion should go on for the foreseeable future,” said Moody’s Analytics chief economist Mark Zandi, who co-leads the monthly employment report.

“If the trade war is resolved, meaning the war simply is not escalated, sentiment would likely stabilize and the expansion would continue on.”

The ADP figures are a welcome sign ahead of a highly anticipated monthly jobs report from the Labor Department that's scheduled to be released Friday. The federal report includes both private sector and government hiring, providing a broader picture of labor market conditions.

Really Good Jobs Numbers!President TrumpDonald TrumpRealClearPolitics reporter says Freedom Caucus shows how much GOP changed under Trump Jake Ellzey defeats Trump-backed candidate in Texas House runoff DOJ declines to back Mo Brooks's defense against Swalwell's Capitol riot lawsuit MORE tweeted on Thursday, an apparent reference to the ADP report.

The service sector accounted for the vast majority of new hires in August, adding 184,000 employees while the goods-producing sector added just 11,000 workers, partly under pressure from Trump’s trade war with China.

A souring economic forecast and tense trade dispute war between the world's two largest economies have raised concerns about an impending recession in the U.S.

“These are industries, sectors that are on the frontline of the trade war,” Zandi said, pointing to weak gains in manufacturing, shipping and transportation jobs. “It’s not great, but it’s not enough to push the broader economy into a recession.”

While the service sector continued to outpace the goods-producing sector, job gains were shared broadly across firms of all sizes. Firms with fewer than 50 employees added 66,000 workers, while mid-sized firms — between 50 and 499 employees — added 77,000 workers. Large companies added 52,000 employees.

“In August we saw a rebound in private-sector employment,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “This is the first time in the last 12 months that we have seen balanced job growth across small, medium and large-sized companies.”