KEY POINTS
- Private companies added 150,000 jobs in June, below May’s revised 157,000 and the Dow Jones consensus of 160,000.
- Leisure and hospitality led gains with 63,000 jobs, the highest among sectors measured by ADP.
- Wage growth slowed for those who stayed in their jobs, with a 4.9% increase, the smallest since August 2021.
Private payroll growth dipped in June, signaling a potential slowdown in the U.S. labor market. ADP’s report on Wednesday showed companies added 150,000 jobs, missing the revised May figure of 157,000 and falling short of the Dow Jones estimate of 160,000. This marks the lowest monthly gain since January.
Leisure and hospitality were the standout sectors, adding 63,000 jobs. Other sectors with gains included construction (27,000), professional and business services (25,000), other services (16,000), and trade, transportation, and utilities (15,000). However, natural resources and mining saw a decline of 8,000 jobs, manufacturing lost 5,000, and the information sector was down by 3,000.
“Job growth has been solid, but not broad-based,” said ADP’s chief economist, Nela Richardson. “Without the rebound in leisure and hospitality, June would have been a downbeat month.”
Wage growth for those who remained in their jobs also slowed, increasing by 4.9% year-over-year, the smallest rise since August 2021. Job switchers saw a 7.7% increase, continuing a downward trend.
Mid-sized companies, with 50-499 employees, added 88,000 jobs, while small businesses contributed just 5,000. Regionally, the South led with 80,000 new jobs, more than half of the total.
ADP’s report precedes the Labor Department’s nonfarm payrolls count, expected to show an addition of 200,000 jobs following May’s 272,000. Historically, ADP’s figures often differ from the Bureau of Labor Statistics, with ADP consistently undershooting the BLS count. For May, the BLS reported a rise of 229,000 private payrolls, 72,000 more than ADP’s estimate.
