The employment report prepared by Automatic Data Processing Inc. (ADP) and Moody's Analytics showed the U.S. private employers added 178,000 jobs in July. Economists had expected a gain of 185,000. The increase for June was revised up to 191,000 from 158,000.

"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," he added.

Meanwhile, Mark Zandi, chief economist of Moody's Analytics, said, "The American job machine continues to operate in high gear. 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."