A worker assembles industrial fans at a manufacturing facility in Lexington, Ky. (Ty Wright/Bloomberg)
key takeaways:
- US private sector payrolls increased by 98,000 in June after an increase of 122,000 in the previous month.
- Education and health services accounted for almost half of the hiring gains.
- According to ADP, workers who changed jobs saw their wages increase by 6.6% from a year earlier.
Payrolls at American companies have been rising steadily; Companies added 98,000 jobs in June
US private sector job creation was solid again in June, marking the best three months of hiring in more than a year.
Company payrolls increased by 98,000, following an increase of 122,000 in the previous month, according to ADP Research data released July 1. The average estimate in a Bloomberg survey of economists called for an increase of 120,000.
The data support the view that the labor market has strengthened after several months of uneven hiring, as job openings have increased and layoffs remain low. If confirmed in official government data, the trend could fuel speculation that the Federal Reserve will raise interest rates this year to control inflation.
Education and health services accounted for almost half of the gains, followed by trade, transport and utilities and financial activities. The number of employees increased in almost every sector and this increase was widespread depending on company size and sector.
“There is stability in the labor market; there is no boom,” Nella Richardson, ADP’s chief economist and a contributor to Bloomberg Television, told reporters in a call with reporters. “It’s a low-rent, but importantly, low-fire” environment.
The ADP report, published in collaboration with the Stanford Digital Economy Lab, also showed that workers who changed jobs saw a 6.6% increase in wages from a year ago, an acceleration from the previous month. For those who stayed, there was little change in the salary increase and it stood at 4.4%.
The government’s employment report due July 2 also includes public sector hiring and is expected to show US employers added 115,000 jobs in June. This would be the strongest six months for hiring since mid-2024.
Looking ahead, a key question is whether falling energy prices and improving consumer confidence will boost the labor market after the US and Iran agreed to an interim deal to end the war. The Middle East conflict had driven up inflation and driven consumer sentiment to record lows.
ADP based its findings on the payrolls of more than 26 million U.S. private sector employees.
