U.S. Private Sector Adds 204,000 Jobs In August, Below Economist Estimates

(RTTNews) - While payroll processor ADP released a report on Thursday showing another notable increase in U.S. private sector employment in the month of August, the pace of job growth once again came in below economist estimates.

ADP said private sector employment rose by 204,000 jobs in August following a downwardly revised increase of 212,000 jobs in July.

Economists had been expecting an increase of about 220,000 jobs compared to the addition of 218,000 jobs originally reported for the previous month.

Even though the pace of job growth fell short of estimates, August still marked the fifth straight month of employment gains above 200,000.

"Steady as she goes in the job market," said Mark Zandi, chief economist of Moody's Analytics. "Businesses continue to hire at a solid pace."

He added, "Job gains are broad based across industries and company sizes. At the current pace of job growth the economy will return to full employment by the end of 2016."

The report said employment in the service-providing sector increased by 164,000 jobs in August, reflecting a slowdown compared to the addition of 190,000 jobs in July.

On the other hand, employment in the goods-producing sector rose by 41,000 jobs in August following an increase of 23,000 jobs in the previous month.

ADP said employment in the manufacturing industry climbed by 23,000 jobs in August, the fastest rate of job growth since December of 2012.

The report also said small businesses added 78,000 jobs, while employment at medium and large businesses increased by 75,000 jobs and 52,000 jobs, respectively.

Friday morning, the Labor Department is scheduled to release its monthly employment report, which includes both private and public sector jobs.

Economists expect the report to show an increase of about 225,000 jobs in August compared to the addition of 209,000 jobs reported for July.

Paul Dales, Senior U.S. Economist at Capital Economics, said, "The ADP survey is by no means a perfect predictor of official payrolls. The average absolute error between the initial estimate of the ADP and the initial payroll estimate is 40,000, and this can be in either direction."

"Nonetheless, a gain in employment of just more than 200,000 in August is consistent with the low level of initial jobless claims and the strength of the employment indices of the business surveys," he added.