Survey: US businesses add solid 179,000 jobs in July

WASHINGTON (AP) - U.S. companies added 179,000 jobs last month, according to a private survey, a steady gain that suggests hiring remains healthy after a sharp fall-off in the spring.

Payroll processor ADP said Thursday that services firms, such as retailers and shipping firms, added 185,000 jobs, while construction companies cut jobs and manufacturers added a meager 4,000 positions.

The report shows that many businesses are still hiring even as growth has been sluggish this year. The additional jobs, in turn, could keep Americans spending and support a pickup in growth in the second half of the year.

Still, the ADP data cover only private businesses and often diverge from the official figures. Economists forecast that the government's jobs report, to be released Friday, will show a gain of 175,000 jobs. The unemployment rate is expected to tick down to 4.8 percent from 4.9 percent.

That would be below June's surprisingly large gain of 287,000. But it would underscore the notion that hiring has recovered after plunging to just 11,000 new jobs in May and a modest 144,000 in April.

Even so, this year's sluggish growth has raised concerns about the economy's broader health. Growth has slowed to an annual pace of just 1 percent in the first six months of the year, half the already-tepid 2 percent pace of the seven-year old recovery.

And despite decent job gains in some months, companies have pulled back on hiring this year: Job growth averaged 172,000 a month, according to the government's figures, in the first half of this year. That's down from 237,000 a month in the final six months of last year.

That downshift likely reflects the fact that the unemployment rate is nearly back to what economists call "full employment" and there are fewer available unemployed to fill jobs. That can weaken hiring, particularly when growth is sluggish.

The unemployment rate may keep falling, however. Most analysts estimate the economy needs to add just 85,000 a month to absorb population growth and keep the unemployment rate steady.