Private payrolls in the U.S. increased by more than expected last month as companies get a boost from lower corporate taxes, ADP and Moody’s Analytics said Wednesday.
Jobs in the U.S. increased by 219,000 in July, while economists polled by Reuters expected a gain of 185,000. July’s job gains were the best since February, when 241,000 jobs were added. Jobs growth for the previous month was also revised up to 181,000 from 177,000.
“The job market is booming, impacted by the deficit-financed tax cuts and increases in government spending,” said Mark Zandi, chief economist of Moody’s Analytics, in a statement. “Tariffs have yet to materially impact jobs, but the multinational companies shed jobs last month, signaling the threat.”
Medium-sized businesses, which employ 50 to 499 people, added the most payrolls in July as they created 119,000. Larger businesses, meanwhile, expanded their payrolls by 48,000. Small businesses, which employ one to 49 people, say payrolls grow by 52,000.
Service-providing companies expanded their payrolls by 177,000, led by gains in education and health services as well as professional services. Education and health services payrolls grew by 48,000 last month, while professional services created 47,000 jobs. Information technology, however, lost 1,000 payrolls in July.
Meanwhile, the goods-producing sector saw payrolls increase by 42,000, led by a 23,000 gain in manufacturing jobs and 17,000 additions in construction.
“The labor market is on a roll with no signs of a slowdown in sight,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Nearly every industry posted strong gains and small business hiring picked up.”
The job gains come as Corporate America enjoys lower taxes compared to last year. In December, the Trump administration slashed the federal corporate tax rate to 21 percent from 35 percent.
The gains also come amid heightened tensions between the U.S. and some of its biggest trade partners. The U.S. has already slapped tariffs on $34 billion worth in Chinese goods, to which China has retaliated. The U.S. has also placed charges on steel and aluminum imports from the European Union.
The report from ADP and Moody’s comes ahead of the U.S. government’s monthly nonfarm payrolls report, which is scheduled for release Friday at 8:30 a.m. ET.
