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:
(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.”