Today’s data updates on the labor market continue to inspire confidence that the US economy will expand at a moderate pace in the foreseeable future. The ADP Employment Report for August was a bit softer than the crowd was expecting for the monthly comparison, but the year-over-year growth trend held steady last month in the low 2%-plus range. Meanwhile, today’s weekly update on new filings for unemployment benefits shows that initial claims remain close to a post-recession low. In short, the latest numbers suggest that the economy will continue to mint jobs at a healthy pace.
Two key points stand out in today’s ADP data. First, private payrolls added more than 200,000 jobs for the fifth straight month. In fact, the total number of jobs created during April through August marks the strongest gain in two years for rolling five-month periods, according to ADP figures.
The consistent growth above 2% on a year-over-year basis rolls on as well and today’s annual increase is also the highest in two years. ADP numbers show that private-sector employment jumped 2.17% in August vs. the year-earlier level, edging out last month’s advance ever so slightly.
“Layoff activity is very low,” notes Russell Price, an economist at Ameriprise Financial. “Companies have a need for the current people on the books and are looking to hire more.”
That’s the message in today’s ADP release and it’s likely that tomorrow’s official jobs report from the US Bureau of Labor Statistics will deliver a similar narrative.
Yes, it’s still debatable if US economic growth is accelerating in a meaningful degree, although that possibility is at least plausible. As for what’s unmistakably clear in the land of macro: the economy’s creating jobs at a steady at relatively elevated pace. It would be surprising, and more than a little discouraging, to learn otherwise in tomorrow’s payrolls report.