Private sector employment grew by 330,000 jobs in July, according to payroll giant ADP, as the economy showed signs of a boost despite increasing worries over the Delta variant of COVID-19.
Small businesses added 91,000 jobs, including 37,000 in businesses with between one and 19 employees, and 54,000 in companies with between 20 and 49 employees, according to the monthly
The service-providing sector added 318,000 jobs in July, including 54,000 in professional and business services such as accounting and tax preparation, and 9,000 in financial activities such as banking. The goods-producing sector added 12,000 jobs, including 8,000 manufacturing jobs. Franchises added 104,500 jobs.
The news wasn’t all good, however. “Private sector employment rose 330,000 on net, a marked slowdown from the 728,000-job pace in the second quarter,” said Nela Richardson, chief economist at ADP, during a news conference Wednesday. “As today’s numbers indicate, the labor market recovery continues to progress, but its path is unique, with several variables still at play that make month-to-month gains in employment levels uneven. Among these challenges are ongoing challenges tied to the pandemic.”
She cited the uncertain path of the Delta variant and its effect on the U.S. and the global reopening process. Shortages in labor supply are also constraining some parts of the market. The shift from the temporarily unemployed workforce seen at the start of the pandemic to a higher concentration of long-term unemployed workers is making it more difficult to match potential employees with employers. Limited caregiving services in the summer months when schools and after-school care programs aren’t generally available is also crimping labor supply.
Richardson is also seeing more temporary workers moving in and out of the labor market and in between jobs. “We’ve seen initial claims for unemployment insurance confirm the heightened uncertainty in the labor market as they have risen back above 400,000 in recent weeks after dropping below the threshold in late June for the first time since the pandemic began,” she said. “Meanwhile, on the plus side, consumer confidence has unexpectedly continued to increase in recent months and basically fully recovered from the COVID-19 recession. That confidence is also showing up in the jobs market in pockets. While the unemployment levels remain elevated, job openings are plentiful and the share of workers quitting their jobs voluntarily has risen above the pandemic level. Supply issues, however, are still hampering growth in the goods sector of the economy.”
