According to the ADP, private sector companies added 497,000 jobs in June, more than double the expected number
The US job market showed no signs of easing in June as companies added far more jobs than expected, payroll company ADP reported on Thursday.
Private sector jobs rose 497k this month, well above May’s revised down gain of 267k and much better than the Dow Jones consensus estimate of 220k. The surge resulted in the largest monthly increase since July 2022.
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From an industry perspective, leisure and hospitality led with 232,000 new hires, followed by construction with 97,000 and trade, transport and utilities with 90,000.
Annual wages rose 6.4%, showing a sustained slowdown but still pointing to looming inflationary pressures.
“Consumer-facing service industries posted a strong June that should boost job creation more than expected,” said Nela Richardson, chief economist at ADP. “But wage growth continues to decline in the same industries, and hiring is likely to peak after a late-cycle pick-up.”
The unexpected surge in payrolls comes despite more than a year of Federal Reserve rate hikes, largely aimed at cooling a job market that still has nearly two open positions for every available worker.
A “Now Hiring” sign at the McDonald’s restaurant in Yorba Linda, Calif. on Monday, September 13, 2021, with salaries starting at $15 an hour for new hires, as signs across the region receive the cold shoulder from workers reluctant to return to the service industry.
Jeff Gritchen | Medianews Group | Getty Images
The ADP count comes a day ahead of the more closely watched Labor Department report on nonfarm payrolls. It is expected to rise by 240k after a gain of 339k in May. Although the two reports can differ widely, the ADP number poses some upside risk to Friday’s report.
Other industries that posted solid gains were education and healthcare (74,000), natural resources and mining (69,000), and the other services category (28,000).
42,000 jobs were lost in manufacturing, 30,000 jobs were lost in information and 16,000 jobs were lost in finance.
Overall, service providers accounted for 373,000, goods producers for 124,000.
Companies with fewer than 50 employees accounted for the largest job gains, adding 299,000 jobs. Companies with more than 500 employees lost 8,000 jobs, while medium-sized companies lost 183,000 jobs.