Survey: Manufacturing Added 8,000 Jobs in August

Strong hiring can fuel solid growth in consumer spending.

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WASHINGTON (AP) — U.S. businesses added a healthy 195,000 jobs last month, a sign companies are still hiring at a solid pace despite the Trump administration's trade war with China.

Payroll processor ADP said Thursday that hiring occurred broadly among small, medium-sized and large businesses, compared with recent months when large firms had dominated. Health care, restaurants and hotels, and professional services all added jobs at a robust pace. Manufacturing added 8,000, despite other data that shows factory output is contracting.

Strong hiring, as long as it continues, can fuel solid growth in consumer spending, the primary driver of the economy. That would propel growth even as businesses have cut back on spending and exports have fallen amid the trade war.

The ADP's figures don't include government hiring and frequently diverge from the government's official report, which is scheduled to be released Friday. Economists expect that report will show 160,000 jobs were added.

The job gains in ADP's report are well above the roughly 100,000 that are needed each month to keep up with population growth and prevent the unemployment rate from rising.

Mark Zandi, chief economist at Moody's Analytics, which compiles the ADP data, said that hiring of at least 100,000 a month, on average, would be enough to keep the economy growing and avoid recession, even with the current tariffs in place.

Those tariffs and China's retaliatory duties have hurt manufacturing companies, farmers, and the shipping industry, but the rest of the economy has so far not been heavily impacted.

The next round of tariffs on Chinese imports, scheduled for Dec. 15, would target about $160 billion of consumer goods. If they are put in place, "that would do significant damage," Zandi said, potentially causing consumers to spend less and businesses to hold off on hiring and even cut jobs.

Yet other data shows that layoffs remain low. The number of people seeking unemployment benefits rose just 1,000 last week to 217,000, the Labor Department said Thursday. Unemployment benefit claims are a proxy for layoffs and the current number is near a 50-year low.

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