(RTTNews) - Employment in the U.S. private sector increased by more than anticipated in the month of July, according to a report released by payroll processor Automatic Data Processing, Inc. (ADP) on Wednesday, although it remains to be seen if the data will be confirmed by the Labor Department report. ADP said that private sector employment increased by 114,000 jobs in July following a downwardly revised increase of 145,000 jobs in June. Economists had expected the report to show the addition of about 86,000 jobs compared to the increase of 157,000 jobs originally reported for the previous month.
The stronger than expected private sector job growth is a positive sign for the labor market, although it is worth noting that last month's Labor Department report showed much weaker than expected job growth than the ADP number implied.
Peter Boockvar, equity strategist at Miller Tabak, said, "Bottom line, last month's wide differential between what ADP reported and what the Government Payroll figure revealed has made today's number dramatically less reliable month to month."
The ADP report showed that the private sector job growth in July reflected the addition of 121,000 jobs in the service-providing sector, which added jobs for the nineteenth consecutive month.
Employment in the professional business services industry rose by 55,000 jobs, while the education and healthcare sector added 48,000 jobs.
The job growth in the service-providing sector more than offset the loss of 7,000 jobs in the goods-producing sector. Manufacturing employment edged down by 1,000 jobs in July.
Additionally, the report showed notable job growth at small and medium-size businesses, which added 58,000 jobs and 47,000 jobs, respectively. Employment at large businesses inched up by 9,000 jobs.
While ADP said that the pace of job creation shown in its July report usually implies a steady unemployment rate, it noted that employment is decelerating.
Since February, the three-month percent change has declined every month, from 0.60 percent then to 0.27 percent in July, ADP said.
Friday morning, the Labor Department is scheduled to release its more closely watched monthly employment report, which includes government jobs.
Economists expect the Labor Department report to show an increase of about 75,000 jobs compared to the meager 18,000 jobs added in June. The unemployment rate is expected to remain at 9.2 percent.
