Private sector payrolls increased by 98,000 in June, according to data released by ADP on Wednesday. This figure is a decline from May's addition of 122,000 jobs but exceeds analysts' expectations of 92,500, as reported by FactSet.
Sector Performance
The education and health services sectors accounted for nearly half of the job growth, adding 48,000 positions. Other sectors that contributed included trade, transportation, and utilities with 15,000 jobs, financial activities with 14,000, information with 7,000, and professional and business services with 2,000. Businesses with fewer than 50 employees added 53,000 jobs, while larger firms employing 500 or more saw a gain of 25,000.
Economic Context
Nela Richardson, ADP’s chief economist, noted that the pace of hiring reflects both supply and demand dynamics in the labor market. She stated,
The pace of hiring is telling a story of both supply and demand. We know it’s taking longer for people to find work, but there are also signs of labor supply constraints in certain industries. For now, the overall effect is a slowdown in job creation.
This slowdown is occurring even as inflation remains above the Federal Reserve's target of 2%.
ADP's report precedes the broader employment data from the Bureau of Labor Statistics, which is expected to show that the U.S. added 100,000 nonfarm jobs in June, down from 172,000 in May.
Related coverage: Spain Reports Over 1,000 Excess Deaths from June Heatwave.
Sources: euronews.com, businessinsider.com.
The increase in private payrolls may signal a mixed outlook for the labor market, influencing sectors such as consumer discretionary and services. Investors will watch for the upcoming employment report from the Bureau of Labor Statistics on Thursday for further insights into job creation trends.