Private-sector hiring slowed last month as employers added 176,000 new jobs, but the gains were consistent with the labor market’s steady though unspectacular growth over the last two years, payroll processing firm ADP said Thursday.
Bolstering the view that the jobs situation remained positive, the Labor Department reported Thursday that initial claims for unemployment benefits dropped by 9,000 last week to 323,000.
That figure was near the Great Recession low of 322,000 reached in early August. The less-volatile four-week average dropped to 328,500, its lowest level since October 2007.
The number of private sector jobs created in August was in line with analyst expectations. The ADP figure was a drop from July’s 198,000, which was revised down slightly. August’s figure was the lowest since the private sector added 141,000 in May.
“It is steady as she goes in the job market,” said Mark Zandi, chief economist of Moody’s Analytics, which assists ADP with the report.
“The job market still really hasn’t kicked into that high gear we’d like to see to get unemployment moving lower in a consistent way,” he said. “But all indications are we’re getting close.”
Zandi said the labor market was holding up well despite the drag from the automatic federal spending cuts and implementation of the healthcare reform law. Although there would be more hiring without those two factors, he said there’s no indication they are significantly hindering job growth.
ADP found job increases across all industries and company sizes last month, though in several cases down from July’s levels.
Service-providing industries added 165,000 jobs, down from 176,000 in July. Construction companies added 4,000 jobs, down from 21,000.
A bright spot was manufacturing. The the sector added 5,000 jobs in August, rebounding from a loss of 3,000 positions the previous month.
The weekly jobless claims figures and the monthly ADP figures are key data points ahead of Friday’s government jobs report for August.
Economists are projecting that the government will report Friday the economy added 180,000 net new jobs in August, up from 162,000 the previous month. They forecast the unemployment rate would hold steady at 7.4%, its lowest level since December 2008.
Federal Reserve Chairman Ben S. Bernanke has said the central bank would start reducing its monthly bond purchase stimulus program this year if the economy — particularly the labor market — continues to improve.
The Fed would end the bond buying when the unemployment rate dropped to 7%, which is forecast to happen in the middle of next year.
Courtesy of Los Angeles Times