August marked the single largest jobs growth in five months and, according to reports, it was led by small businesses, not large. Payroll processor Automatic Data Processing Inc. (ADP), said private-sector payrolls increased by 201,000 last month beating Wall Street expectations.

ADP reported that the largest job gains were created by businesses with less than 50 employees at 99,000, the greatest number of which were in sales. Medium-sized businesses (those with less than 500 employees) created 88,000 jobs and large businesses (500 and above) created only 16,000 in August. Employment increased 185,000 in the service sector and 16,000 in the goods-producing sector.

ADP’s payroll reports precede estimates released by the U.S. Department of Labor and often differ substantially in actual numbers but are still watched closely for information about private and public-sector jobs.

There were two other jobs reports with a positive message too. Challenger, Gray & Christmas, an outplacement consultancy, reported that the number off announced layoffs fell to 32,000 in August from 37,000 in July which is the lowest level since December 2010.

Friday’s government report said the unemployment rate fell to 8.1 percent down from 8.3 percent in July. The report also said that 41,000 fewer jobs were created in July and June than were previously reported. Cash-short governments were the key reason why June and July’s estimates were weaker than originally reported. Federal, state and local governments cut 39,000 jobs during that time but was only estimated to be 18,000. In previous recoveries, governments have typically added jobs, not cut them.

The economy has averaged just 139,000 added jobs per month which is far behind the 153,000 national average this time last year. Also, The U.S. Department of Labor announced that first-time jobless claims fell in the most recent weekly data.


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