As unemployment rates fall, the labor market is expected to reach full employment, according to the ADP and Moody's Analytics National Employment Report.

The National Employment Report indicates that private sector employment increased 177, 000 jobs from May to June.

This is below the U.S. Bureau of Labor Statistics latest Employment Situation Summary report, which indicated that as jobs increased in May to 223,000 new jobs, the unemployment rate fell to 3.8%. However, ADP excepts the employment rate to continue to rise.

The chart below demonstrates a moderately steady rate of increase since 2013:

ADP 2018

 (Source: ADP, Moody’s Analytics)

Although increases in job growth are important for the market, Moody's Chief Economist of Analytics Mark Zandi believes that finding proper workers will be a large hindrance.

“Business’ number one problem is finding qualified workers. At the current pace of job growth, if sustained, this problem is set to get much worse,” Zandi said. “These labor shortages will only intensify across all industries and company sizes.”

The report indicates that construction jobs increased once again, and overall the goods-producing sector is predicted to increase by 29,000 jobs.

Below is a breakdown of job segments that saw increases or decreases in employment between May and June:

Natural resources and mining: Increase 5,000

Construction: Increase 13,000

Manufacturing: Increase 12,000

The service-providing sector is predicted to increase by 148,000 jobs, including:

Trade, transportation and utilities: Increase 24,000

Information: Decrease 2,000

Financial activities: Increase 7,000

Professional and business: Increase 33,000

Education and health: Increase 46,000

Leisure and hospitality: Increase 33,000

Other services: Increase 7,000

“The labor market continues to march towards full employment,” Vice President and Co-Head of ADP Research Institute Ahu Yildirmaz said. “Healthcare led job growth once again and trade rebounded nicely.”

Most Popular Articles

Sales of new houses will rise to a 13-year high in 2020, NAR’s chief economist says

Sales of new homes probably will rise to a 13-year high in 2020 as the U.S. dodges a recession, according to Lawrence Yun, chief economist of the National Association of Realtors.

Nov 08, 2019 By