A report from ADP on Wednesday showed private sector job growth edged down in June, suggesting the U.S. labor market may be slowing.
Businesses added 150,000 jobs this month, down from May’s upwardly revised estimate of 157,000 jobs and the Dow Jones consensus estimate of 160,000 jobs. The total was the lowest monthly gain since January.
Without the surge in leisure and hospitality hiring, the total would be much lower. The industry added 63,000 jobs, far and away the largest increase of any category measured by payroll processing company ADP.
Other growing industries include construction (27,000), professional and business services (25,000), other services (16,000) and trade, transportation and utilities (15,000).
On the downside, natural resources and mining fell by 8,000, manufacturing fell by 5,000, and information fell by 3,000.
“Job growth has been solid but not broad-based,” said Nela Richardson, chief economist at ADP. “June will be a pessimistic month if leisure and hospitality hiring does not rebound.”
For those who stayed in the workforce, wage growth also slowed, to 4.9% annually, the smallest increase since August 2021. Statistics show a downward trend.
Most of the job creation came from companies employing 50-499 people, a group that added 88,000 workers this month. Small businesses contributed just $5,000. From a geographical perspective, 80,000 job opportunities come from the South, accounting for more than half of the total.
ADP’s report is a precursor to more closely watched nonfarm payrolls data due Friday from the Labor Department. The report predicts 200,000 new jobs will be added after 272,000 jobs were added in May.
The two reports often differ, sometimes significantly, with ADP’s statistics consistently lower than those from the Bureau of Labor Statistics. The U.S. Bureau of Labor Statistics (BLS) reported that private employment increased by 229,000 in May, 72,000 more than ADP expected.
About The Author
