(RTTNews) - Wednesday morning, Automatic Data Processing, Inc. (ADP) released its report on private sector employment in the month of July, showing an unexpected increase in private sector jobs following a notable decrease in the previous month.

The report showed that non-farm private employment increased by 9,000 jobs in July following a revised decrease of 77,000 jobs in June. Economists had been expecting employment to decrease by about 60,000 jobs.

While the July figures showed a slight employment gain, ADP noted that the recent three-month average of negative 14,000 suggests that the weakened employment situation continues.

The modest increase in private sector employment in July came as strong growth in the service-providing sector more than offset continued weakness in the goods-producing sector.

ADP said that the service-providing sector added 74,000 jobs in July, while the goods-producing sector lost 65,000 jobs. Manufacturing employment fell by 49,000 jobs in July, contributing to the weakness in the goods-producing sector.

The report also showed some lessening of the recent strain on employment in the two sectors of the economy hit hardest by recent problems in mortgage markets, residential construction and financial activities related to home sales and mortgage lending.

While construction employment fell by 16,000 jobs, marking the twentieth consecutive monthly decline, it was one of the smallest declines in recent months. Additionally, employment in financial activities increased by 4,000 jobs.

The unexpected increase in private sector employment may generate some optimism about the outlook for the Labor Department’s monthly employment report due to be released on Friday.

However, it is worth noting that the numbers in the ADP have not had a strong correlation with the Labor Department numbers in recent months.

While the Labor Department has reported a drop in employment in each of the past six months, the ADP report only showed decreases in private sector employment in February and June.

Economists currently expect the Labor Department report to show a decrease of about 75,000 jobs in July following a decrease of 62,000 jobs in June. The unemployment rate is expected to edge up to 5.6 percent.

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Posted in Categories: Economy, Forex, Releases, USA.

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