Jobs recovery slower than a snail

Employment in the private sector is growing at two-thirds the rate of the most sluggish jobs recovery in postwar America, according to ADP report. One bright spot for jobs: midsize manufacturers.

By , Business editor

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    In this April 1, 2011, file photo, Zen Hotel maid Ereyda Yanez makes a bed in a hotel room where she works in Palo Alto, Calif. The US service sector, which employs nearly 90 percent of the country’s work force, expanded for a 20th straight month in July, according to the ADP employment report. But the pace of the jobs recovery has been slower than even the most sluggish recovery in postwar America.
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The labor market's recovery from the Great Recession is not proceeding at a snail's pace, it's actually slower than that.

The slowest jobs recovery in the postwar era was the aftermath of the 2001 recession, the so-called "jobless recovery." Eighteen months after the economy finally began adding jobs, private sector employment had grown by 2.7 million, or about 2.5 percent. That was considered very sluggish, until now.

Eighteen months after the current recovery began adding jobs, the private sector has added only 1.9 million jobs, or 1.8 percent, according to the ADP employment report released Wednesday. A jobs recovery at two-thirds the speed of a snail is not slow, it's barely alive.

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The latest ADP data bear this out. In July, the economy added 114,000 private-sector jobs. That's the smallest increase since last fall (except for April, plagued with the worldwide disruptions following Japan's tsunami). While growth in service jobs was so-so, employment in the goods-producing sector actually fell by 7,000.

Many analysts don't like the ADP payroll data because, month-to-month, it can vary widely from the more trusted employment numbers from the federal government, which will be released Friday. And it only covers the private sector. But over time, ADP revises its data to mirror the federal numbers and, unlike the federal data, it breaks down employment by the size of the company. That yields some interesting insights.

For example: Compared with the recovery of the early 2000s, job growth this time has been slower in almost every sector: small goods-producing companies and large ones as well as service companies of any size. The one exception is manufacturing, specifically goods made by midsize companies employing between 50 and 499 workers. Employment in that sector has grown nearly twice as fast as it did after the previous recession: 2.0 percent vs. 1.1 percent over 18 months.

Will that bright spot continue to burn brightly? The signs aren't good. The sector lost 3,000 jobs last month, according to ADP, the first drop in 10 months.

Something will have to get the jobs market moving again.

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