U.S. Private Sector Hiring Lost Traction in June -- ADP

By Xavier Fontdegloria

U.S. employers continued to add jobs at a strong pace in June, albeit at a slower pace than that of May, signaling that the healing of labor market from the pandemic continues to lag behind the broader economic recovery.

The U.S. nonfarm private employment increased by 692,000 in June, data from ADP National Employment Report showed Wednesday. This is above the 550,000 rise expected by economists polled by The Wall Street Journal.

In May, the U.S. private sector added 886,000 jobs, down from an initial estimate of 978,000.

"The labor market recovery remains robust, with June closing out a strong second quarter of jobs growth," said Nela Richardson, chief economist at ADP. While payrolls are still nearly seven million short of pre-pandemic levels, about three million jobs have been created since the beginning of the year, she said.

Recent surveys point to current labor shortages in many sectors, but employment should gain steam over the next months as the services sector reopens and the pandemic retreats, economists say.

Large businesses, those of at least 500 workers, created 240,000 jobs in June, followed by medium businesses--between 50 and 499 employees--which added 236,000 jobs. Small businesses, with a maximum of 49 employees, registered 215,000 payroll gains.

By sector, the service-providing sector created the vast majority of jobs, 624,000. More than half of them, or 332,000 jobs, were added in the leisure and hospitality sector. Education and health services gained 123,000 jobs.

Payrolls in the goods-producing sector were up by 68,000, with 47,000 in construction, 19,000 in manufacturing and 2,000 in natural resources and mining.

"Service providers, the hardest hit sector, continue to do the heavy lifting, with leisure and hospitality posting the strongest gain as businesses begin to reopen to full capacity across the country," Ms. Richardson said.

The report, carried out by the ADP Research Institute along with Moody's Analytics, is based on data through the 12th of the month.

The U.S. Department of Labor is expected to release its June employment report, which covers the same period as the ADP National Employment Report, on Friday. Economists polled by The Wall Street Journal are expecting it to show nonfarm payrolls up by 706,000 for the month and the unemployment rate down to 5.6%. The ADP series can diverge considerably from the Labor Department's data on a monthly basis.

Write to Xavier Fontdegloria at [e-mail]

(END) Dow Jones Newswires

June 30, 2021 08:49 ET (12:49 GMT)

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