U.S. private sector employment rose by a surprisingly strong 201,000 jobs last month and the number of planned layoffs fell in August -- more evidence that the recovery in the world's largest economy has farther to go.
Data released Thursday in the ADP National Employment Report showed August to be the biggest gain for employment in five months, following July's 173,000 increase. The report's numbers beat analyst expectations for a 140,000 increase in August, according to several analyst reports.
While noting that the ADP has "differed from the BLS private employment number by about 45k jobs per month," a statement from Barclay's concluded that "there has been no clear directional bias" in the reports.
"This report is in line with our expectations for tomorrow's employment report of a 150k increase in headline payrolls, a 160k increase in private payrolls, and a one-tenth drop in the unemployment rate to 8.2 percent," Cooper Howes, an analyst at Barclay's, said in a statement regarding ADP's Thursday announcement.
Meanwhile, a report from Challenger, Gray & Christmas, Inc. stated that job cuts in August dropped to 32,239 -- the lowest numbers for layoffs in 20 months. Without drawing a clear conclusion, the consultancy said the slowing pace of layoffs could either be "further evidence of an improving economy" or it just "a summer lull in jobcut activity."
Job figures from the previous decade, the report stated, have shown a similar lull in job losses compared to the entire year's monthly average.
In either case, a sustained increase in jobs and hiring along with a decrease in layoffs would help spur wage gains required to stimulate consumer spending for a more general economic recovery.
ADP's report comes a day before the U.S. Labor Department's job estimate is set to be released Friday, containing both private- and public-sector payroll data.