In The News
Economic Watch: U.S. Jobs Picture Improves, Manufacturing Struggling
The employment picture in the U.S. continues to improve but the manufacturing sector is fighting to show better signs of life.
Private sector employment increased by 190,000 jobs in August, according to new report from payroll processor ADP, as the July total of jobs added was revised downward from 185,000 to 177,000.
"Recent global financial market turmoil has not slowed the U.S. job market, at least not yet. Job growth remains strong and broad-based, except in the energy industry, which continues to shed jobs," said Mark Zandi, chief economist of Moody's Analytics. "Large companies also remain more cautious in their hiring than smaller ones."
The report comes as the federal government releases its latest employment figures, including its August unemployment rate, on Friday morning.
The August ADP total as the third best monthly figure so far this year, surpassed by a May increase of 197,000 new jobs and June's improvement of 231,000. However, the three-month average in hiring has slowed from 263,000 at the end of last year to 200,000 in August.
Goods-producing employment rose by 17,000 jobs in August, more than double the 7,000 gained in July. The construction industry added 17,000 jobs in August, up from 15,000 last month. Meanwhile, manufacturing added 7,000 jobs in August, after gaining only 1,000 in July.
Service-providing employment rose by 173,000 jobs in August, up slightly from 170,000 in July. Professional/business services contributed 29,000 jobs in August, up 3,000 from July. Trade/transportation/utilities grew by 28,000, down from 34,000 the previous month.
(A complete infographic is at the bottom of the story.)
In the meantime, a full report on factory activity was mixed as orders increased while shipments fell, according to the U.S. Commerce Department, following an advance report from about a week ago.
New orders for manufactured good in July increased 0.4% from the month before following an upwardly revised 2.2% June hike.
Within this area, orders for manufactured durable goods, those designed to last at least three years posted a 2.2% gain following 4.1% June increase. It was led by a 5.5% hike in new transportation orders, including a 4% increase in orders for motor vehicles and parts, the best improvement in a year.
Orders for non-defense capital goods excluding aircraft, a proxy of future business investment, showed a 2.1% increase, down from 2.2% in the advance report. Shipments of these so-called "core capital" goods increased 0.6% in July from June, unchanged from last week's report.
Meantime, overall shipments of factory orders, down three out of the last four months, fell 0.2% in July from June. However, shipments of manufactured durable goods increased for the second straight months with a 1% improvement.
This manufacturing report follows two from the day earlier by private groups showing the sector's growth throttled back in August, according to their surveys of the nation's purchasing executives.
"Following yesterday's multi-year low in the national Institute for Supply Management [report], it is clear U.S. manufacturing is unlikely to be a sizable contributor to third-quarter gross domestic product, without a near-term reversal in activity," said Lindsey Piegza, chief economist with Stifel Fixed Income. "This morning's drop...coupled with weakness in core factory orders continues to support this disappointing conclusion. In 2014, manufacturing and exports appeared to be the silver lining to the recovery only to hit a wall amid a rapidly rising dollar and stagnant global demand."