Hiring Toughens as Franchises Show Strong Gains Again in August
The change in U.S. franchised employment increased by a solid 21,200 hires in August, according to ADP Research Institute. August's figure is a strong hiring performance for franchised establishments but falling below July's even more robust growth of 26,600 franchise jobs.
“In August, the goods-producing sector saw the best performance in months with solid increases in both construction and manufacturing,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute about the adding of private sector jobs. Increasing 56,000 jobs, trade, transportation and utilities were the largest sector to hire. “Additionally, the trade industry pulled ahead to lead job gains across all industries, adding the most jobs it has seen since the end of 2016,” said Yildirmaz. "This could be an industry to watch as consumer spending and wage growth improves.”
Auto dealers and restaurants were the first and second largest franchise sector to lead the increase in hiring in August. Restaurants grew by 8,000 jobs and auto dealers by 8,800. Franchised restaurant owners and car dealers have complained of the increasing difficulty of finding people to hire.
Mark Zandi, chief economist of Moody’s Analytics, said, “The job market continues to power forward. Job creation is strong across nearly all industries, company sizes. Mounting labor shortages are set to get much worse. The initial BLS employment estimate is often very weak in August due to measurement problems, and is subsequently revised higher. The ADP number is not impacted by those problems.”
Franchise job hiring numbers are derived from ADP’s actual payroll data and produced in collaboration with Moody’s Analytics. Private sector employment had a robust increase of 237,000 in August, while small businesses increased by 48,000 hires, mainly from service-providing small businesses.