Private payrolls rose by 98,000 in June, less than expected, ADP reports
Companies added slightly fewer workers than expected in June, with hiring leaning heavily toward health-related industries, ADP reported Wednesday.
Private sector employment rose by a seasonally adjusted 98,000 from an unrevised 122,000 in May, the payroll processing firm reported, slightly below Dow Jones’ consensus forecast of 110,000.
The ADP report is a precursor to the more widely watched nonfarm payrolls count that the Bureau of Labor Statistics will release Thursday. ADP’s counts in recent months have generally been below the official government report, which shows mostly solid job creation this year.
Almost half of June’s growth (48,000) came from the education and health services sector, which has been a consistent leader in job growth. All but 2,000 of the new jobs came from services.
Other sectors that recorded gains included trade, transportation and utilities (15,000), financial activities (14,000) and other services (8,000). Natural resources and mining, the only sector in the red, lost 5,000 jobs. Leisure and hospitality added just 2,000 positions, continuing a slow year for an industry seen as an indicator of underlying consumer demand.
“The pace of hiring tells the story of both supply and demand. We know it’s taking people longer to find jobs, but there are also signs of labor supply constraints in certain industries,” said Nela Richardson, chief economist at ADP. “The overall effect for now is a slowdown in job creation.”
While annual wage increases for those who stayed in their jobs remained steady at 4.4%, for those who changed jobs, the rate rose to 6.6%.
Job gains have skewed toward small businesses. Organizations with fewer than 50 employees gained 53,000, while companies with 500 or more employees gained 25,000 and those in between gained 29,000.
The consensus on Wall Street is that employment will increase by 115,000 people in June, while the unemployment rate will remain stable at 4.3%. Average hourly earnings are expected to increase by 0.3% monthly and 3.5% annually.
