Economic Snapshot: Private sector employment increases by 179,000 jobs

Private sector employment increased by 179,000 jobs from June to July, up marginally from the 176,000 jobs added in the previous month, according to the ADP Employment Report.

Medium businesses led the way with job additions, increasing by 68,000 jobs in July. This is up from 56,000 last month. Employment at small businesses increased by 61,000 jobs, down from 86,000 in June. Employment at large companies increased by 50,000 jobs, up from June’s 34,000.

Service-producing employment rose by 185,000 jobs in July, down from 203,000 in the previous month. Professional/business services contributed 59,000 jobs, down from 78,000 in June. Trade/transportation/utilities increased by 27,000 jobs in July, down from 41,000 jobs added last month. Financial activities added 11,000 jobs, up marginally from last month’s 9,000 jobs.

Goods-producing employment lost 6,000 jobs in July, following June’s losses of 28,000. The construction industry lost 6,000 jobs after losing 4,000 in June. Meanwhile, manufacturing gained 4,000 after losing 15,000 last month and three consecutive months of losses.


Real gross domestic product increased at an annual rate of 1.2 percent in the second quarter of 2016, according to the “advance” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 0.8 percent.

The increase in real GDP reflected positive contributions from personal consumption expenditure (PCE) and exports, which were offset partly by negative contributions from private inventory investment, nonresidential fixed investment, residential fixed investment, and state and local government spending. Imports, which are a subtraction from GDP, decreased.

The Bureau emphasized that the second-quarter advance estimate is based on source data that is incomplete or subject to further revision by the source agency.

ISM manufacturing index

The ISM Manufacturing Index decreased 0.6 percentage points to 53.2 in July. Economic activity in the manufacturing sector expanded for the fifth consecutive month and the overall economy grew for the 86th and consecutive month.

The New Orders Index decreased 0.1 percentage points to 57 percent in July. The Production Index increased 0.7 percentage points to 54.7 percent.

The Employment Index registered 49.4 percent, decreasing 1 percentage point over the last month. Inventories of raw materials registered 49.5 percent, an increase of 1 percentage point. The Prices Index decreased 5.5 percentage points to 55 percent in July, indicating higher raw materials prices for the fifth consecutive month.

Eleven of the 18 manufacturing industries reported growth in July and seven reported contraction.

ISM non-manufacturing index

The ISM Non-Manufacturing Index dipped 1 percentage point to 55.5 percent in July, which represents continued growth in the non-manufacturing sector at a slower rate. Economic activity in the non-manufacturing sector grew for the 78th consecutive month.

The Business Activity Index decreased 0.2 percentage points to 59.3 percent, reflecting growth for the 84th consecutive month, albeit at a slightly slower rate. The New Orders Index increased 0.4 percentage points to 60.3 percent.

The Employment Index decreased 1.3 percentage points to 51.4 percent in July. The Prices Index decreased 3.6 percentage points to 51.9 percent, indicating prices increased in July for the fourth consecutive month.

Fifteen of the non-manufacturing industries reported growth in July and three reported contraction.

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