The U.S. private sector added 201,000 jobs from July to August, the largest increase in five months, Automatic Data Processing said Thursday.
Despite significant gains, most of the new positions surfaced in the service industry, compounding fears that America's employment recovery is based largely on low-wage, minimal-growth positions.
The National Employment Law Project released a report earlier this week, warning economists that low-wage job growth is dangerous without the addition of higher-paying positions.
The advocacy group claims lower-waged positions grew 2.7 times faster than jobs in the mid- to-higher wage categories during the period stretching from early 2010 to the first quarter of 2012.
When surveying jobs created over the past month, 99,000 of the positions popped up at small firms, ADP noted. Medium-sized firms produced 86,000 jobs, while large businesses added 16,000 jobs in August.
Only 3,000 positions surfaced in the manufacturing industry, and 16,000 appeared in the goods-producing sector.
ADP, however, is still positive about the payroll figures from August.
"The improvement in job creation this month is encouraging and we hope it continues across all sectors of the U.S. economy," said Carlos Rodriguez, president and CEO of ADP.
Jobless claims in August also fell, suggesting at least some improvement in the labor market. For the week ending Sept. 1, the number of initial jobless claims declined from 12,000 the previous week, hitting 365,000 filings.
Capital Economics, which predicted only 100,000 job gains for the month of August, believes it may have been too pessimistic in its initial forecast. However, the firm says "employment would need to grow by a lot more than 200,000 per month to bring the unemployment rate down at a pace more agreeable to the Fed."
The good news is planned employer layoffs fell 12.5% from July to August, with only 32,239 workers shed from the payrolls last month, Challenger, Gray & Christmas Inc. reported Thursday.