PhotoAnother 178,000 private sector jobs were created in July, according to the ADP National Employment Report.

While that's a decline of 13,000 from the June total, it should be noted that the previous month's estimate of 158,000 was revised upward by 33,000.

The report, produced by the ADP Research Institute and Moody's Analytics, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

"Job gains continued to be strong in the month of July," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. "However, as the labor market tightens employers may find it more difficult to recruit qualified workers."

Where the jobs are

Medium-sized businesses (50-499 employees) formed the backbone of the gains, creating 83,000 payroll positions. Small businesses cranked out 50,000 new jobs followed by large firms at 45,000.

The vast majority of new jobs -- 174000 -- were in the services sector, led by professional/business services (+65,000), education/health services (+43,000), administrative/support services (+42,000) and health care/social assistance (+41,000).

The goods-producing sector contributed a scant 4,000 payroll positions, with construction adding 6,000 and natural resources/mining 3,000. Manufacturing lost 4,000 jobs.

“The American job machine continues to operate in high gear,” said Moody's Analytics Chief Economist Mark Zandi. “Job gains are broad-based across industries and company sizes, with only manufacturers reducing their payrolls. At this pace of job growth, unemployment will continue to quickly decline.”

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