U.S. jobs growth was faster than expected in August, according to a report Thursday from payroll firm Automatic Data Processing.
Private employers added 195,000 jobs during the month, ADP said in a statement, exceeding economists' average forecast for a gain of 150,000. The month also marked an increase from the 156,000 jobs added in July.
It was the strongest jobs growth reported by ADP since April and could indicate that the U.S. labor market held up remarkably well last month as President Donald Trump ratcheted up his trade war with China, and as the Asian country hit back with retaliatory measures, roiling global markets. Trump, who is running for reelection in 2020, has repeatedly promised that his policies will create "jobs, jobs, jobs."
The unusually strong data from ADP also suggests that an official U.S. government report due out Friday on August jobs growth might similarly surprise on the upside.
Economists are currently projecting that the Bureau of Labor Statistics report will reveal that 160,000 new jobs were created in August, slowing from July's 164,000, based on a survey by the data provider FactSet. But Mark Zandi, chief economist of Moody's Analytics, told reporters on a conference call hosted by ADP that the official number will likely be far higher, closer to 195,000.
"The underlying economy is OK, it's fine, except for those sectors that are on the front lines of the trade war," said Mark Zandi, chief economist of Moody's Analytics, told reporters on a conference call hosted by ADP. "It has not bled out into the rest of the economy, but that's the concern."
Economists and Federal Reserve officials have said that the trade war has contributed to a slowing global economy, souring growth prospects for U.S. manufacturers that provide a disproportionate number of high-paying blue-collar jobs.
According to the ADP report, the bulk of the August gains, some 184,000, came from business-services categories including "professional/technical services," "health care/social assistance" and "leisure/hospitality."
Goods-producing industries like manufacturing, mining and construction added just 11,000 jobs.
According to Zandi, the Bureau of Labor Statistics report due Friday is likely to be higher than economists are estimating.
He said private employers typically are slow to respond to the Labor Department's monthly survey during August, when many people are away from their desks on summer vacations. That tends to lead the government staffers to estimate a slower pace of jobs growth by U.S. businesses.
But the U.S. Census Department is ramping up for its 2020 efforts and may have hired tens of thousands of employees during the month, pushing up government payrolls, Zandi said.
Still, it's unlikely the robust pace of jobs growth can last, said Ian Shepherdson, chief economist at the forecasting firm Pantheon. He wrote in a note to clients on Friday that business-employment surveys suggest smaller gains in the months ahead.
"A decent August report is more likely than not," Shepherdson wrote. "By the same token, significantly weaker numbers over the next few months also are more likely than not."
Shepherdson added that Hurricane Dorian, which battered the east coast of Florida in recent days and is now just off the Carolinas, tracking north toward Virginia, could lead to an increase in jobless claims in coming weeks.