ADP Jobs Report: Private Sector Added 172,000 Jobs in June

July 7, 2016

This month’s ADP National Employment Report beat economists’ expectations and may bode well for Friday’s report from the Labor Department, which analysts hope will beat last month’s dismal tally of 38,000 jobs. ADP’s report, which measures additions to private payrolls, showed 172,000 jobs added for June – higher than 159,000 jobs, the average prediction of economists polled by Reuters.

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“Job growth revived last month from its spring slump. Job growth remains healthy except in the energy and trade-sensitive manufacturing sectors,” said Mark Zandi, chief economist of Moody’s Analytics, which prepares the report with ADP. “Large multinationals are struggling a bit, and Brexit won’t help, but small- and mid-sized companies continue to add strongly to payrolls.”

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Small businesses added the most jobs last month; companies with fewer than 50 employees added 95,000 jobs in June. Medium-sized businesses with between 50 and 499 employees added 52,000 jobs, and large businesses with 500 or more employees added 25,000 jobs.

The goods-producing sector shed 36,000 jobs last month – construction lost 5,000 jobs, while manufacturing lost 21,000 jobs.

The service-providing sector added 208,000 jobs in June. Trade, transportation, and utilities added 55,000 jobs, nearly twice May’s tally. Professional and business services added 51,000 jobs, after adding 47,000 jobs in May. Financial activities added 2,000 jobs, after gaining 13,000 the previous month.

Economists are predicting that tomorrow’s report from the Bureau of Labor Statistics will show the addition of 175,000 jobs to public and private, non-farm payrolls. Unemployment is expected to increase slightly to 4.8 percent – not necessarily bad news, given that last month’s lower number was due to nearly half a million workers dropping out of the workforce.

The monthly report from the labor department also tracks wage growth, which has been largely stagnant since the end of the recession. Despite gains in April and May, average hourly earnings have increased only 2.5 percent for the year so far. The PayScale Index, which updates tomorrow, forecast 2 percent year-over-year growth in wages for Q2 2016.

ADP National Employment Report: Private Sector Employment Increased by 172,000 Jobs in June