There may be worker shortages, but there is no shortage of job gains.
ADP and Moody’s Analytics reported Wednesday that private payrolls in the United States surged by 219,000 positions in July, topping the 185,000 spots seen by economists.
The surge was broad-based, save for verticals that might be expected to be impacted by some structural changes, including online information services and retail. Info tech lost a net 1,000 positions.
The showing is the best since February of this year, when the economy added 241,000 positions. June’s data was revised upward, to 181,000 positions added versus previous estimates of 177,000.
Parsing the data, mid-sized firms, with between 50 and 499 workers added the most of that 219,000 tally with 119,000 roles. Service roles were 177,000, led by education and health care.
In a conference call with analysts and reporters after the data debuted, Chief Economist Mark Zandi of Moody’s said that the numbers represent a “great report” that shows that job growth among smaller firms has accelerated from both the beginning of this year and from this time last year. Taken as a trend, the numbers show monthly job creation stands at a pace of about 200,000 positions, up from past levels of about 175,000 positions. Unemployment, he said, is in “rarefied” territory, solidly in the three percent range — a level that has been touched only a few times in the nation’s history.
The positive trend and job count threshold should continue into this time next year, he told analysts and reporters on the call, buoyed in part by tax cuts and fiscal stimuli.
Yet, that strength is unsustainable over the longer term, and, perhaps a bit tongue-in-cheek, Zandi cautioned, “Enjoy it while you can.” On the other side of the sunnier numbers lie darker horizons, with, at least, some uncertainty tied to the ongoing trade disputes that are being waged on a global stage.
Chief among those disputes, of course, is the spat between China and the United States, which may eventually impact job creation. A real impact, one that would be a lever behind a recession, would be felt if tariffs reach a 25 percent level on a broader swath of goods than have been levied by the Trump administration. As has been previously reported, the U.S. has slapped tariffs on $34 billion worth of Chinese goods, and President Donald Trump has hinted that hundreds of billions of dollars more of goods could be on the table for tariffs ass well.
But, “if this is the end of it, it’s no big deal,” Zandi told listeners.
The Amazon Effect
In response to a series of questions posed by PYMNTS, Zandi noted that the impacts felt in information services and retail have been both long-lived and deep. Amid more recent changes, he said, print media has seen “tremendous” job losses that are not new — evidenced, for example, in cuts at the Daily News the past few weeks in New York.
The much publicized Amazon effect has continued, hitting retail ranks at the register and in the aisles. Yet, as Zandi stated to PYMNTS on the call, the effect may be one that shows some structural shifts afoot. He stated that smaller firms have posted positions online that are proving relatively harder to fill, as those firms create/fill openings related to product returns and staffing call centers. The movement, then, might be broad-based enough to have an eventual positive impact on the industry, he said.
Friday, the government will release its own official set of jobs-related numbers.