ADP: 200,000 Private Sector Jobs in July

Sequestration cuts continue to take their toll on American workers, particularly in manufacturing.

WideModern_adp_130731.jpg

ADP's private sector employment numbers indicate modest growth, which bodes well for Friday's jobs report.

By + More

Private sector employers added 200,000 jobs in July, according to payroll processing firm ADP. The figure comes in well above consensus expectations, at 179,000 according to Bloomberg, setting a positive tone ahead of Friday's jobs report from the Labor Department.

[READ: Growth in Home Prices Slowing, Case-Shiller Index Shows]

The data represent job growth across a wide spectrum of industries, including 49,000 new jobs in professional and business services and 45,000 in trade, transportation, and utilities. Construction also posted a strong 22,000 new jobs, a possible sign that the housing recovery has continued to drive employment. Posting more measured growth was the finance industry, with 4,000 jobs. Meanwhile, manufacturing came up short, losing 5,000 workers.

If ADP's numbers are accurate, private sector job growth of 200,000 would be roughly on par with the June employment estimate from the government, which showed 195,000 new jobs in that month, including 202,000 private sector jobs.

The information the report gives about the job market reflects the effects of budget cutbacks in Washington, said Mark Zandi, chief economist at Moody's Analytics, which co-produces the ADP report, in a Wednesday morning call with journalists.

[BROWSE: Political Cartoons on the Economy]

"I'd say in terms of fiscal policy I think there's evidence that government spending cuts, the sequester is having an impact," he says. In particular, he thinks sequestration cuts to defense spending have helped to put manufacturing growth in reverse.

However, he adds that two policies thought to weigh on the job market have not had significant effects. One of those is health care reform. In the past, Zandi has said the policy's employer mandate, stipulating that firms with 50 or more full-time employees would have to provide insurance or pay a fine, was causing employers to pull back on hiring full-time workers. However, he says he no longer sees that, adding that it's likely not an effect of the one-year delay in the employer mandate, announced by the Obama administration last month.

"That's evaporated in the summer. I really don't see any significant evidence of an impact from health care reform," said Zandi.

[ALSO: New Jobless Claims Jump 7,000, But Still Improving]

He also added that altogether, the expiring tax cuts that occurred at the start of the year coupled with government spending cuts have had a milder effect than originally expected.

It may be encouraging that job growth isn't slower than some economists had anticipated at the start of the year. However, employment opportunities are not accelerating. Job growth of 200,000 is solid, but it also represents a job market that is not improving more quickly.

"Bottom line, the numbers weren't too bad," said Zandi. "[There's] no real acceleration in job growth yet, but it's holding its own, and that's actually quite impressive in the context of all of the fiscal drag and all the fiscal headwinds the economy's been trying to digest."

More News: