ADP finds private sector added 158,000 jobs in June

Private sector employment increased by 158,000 last month, according to payroll giant ADP, in another sign of the job market moving toward what economists consider “full employment.”

Small businesses added 17,000 jobs, mostly in businesses with between 20 and 49 employees, although employment growth was zero at smaller businesses. Midsize businesses with between 50 and 499 employees added 91,000 jobs. Large businesses added 50,000 jobs, including 28,000 in companies with between 500 and 999 employees, and 22,000 in businesses with 1,000 employees or more.

“It was a good month, another solid month,” said Mark Zandi, chief economist at Moody’s Analytics, which compiles the monthly national employment report with ADP, during a conference call with reporters Thursday. “We’ve been getting job growth consistently now for about seven years. The average monthly job growth is between 150 and 200K, some periods a little stronger than that, other periods a little weaker, but that’s where we’ve been, remarkably stable growth over this period, and that’s what we got this month, right in that zone of 150 to 200K.”

ADP National Employment Report June 2017

He pointed out that’s about double the rate of job growth necessary to absorb the growth in the working age population, and he expects the unemployment rate of 4.3 percent will continue to decline. However, Zandi sees some “soft spots” ahead and believes that retail jobs will continue to decline as brick-and-mortar stores continue to lose business to online merchants such as Amazon. He also expects to see vehicle manufacturing jobs leveling off, as vehicle sales have declined from their peak last year. Auto makers are adjusting their production schedules and several are keeping their plants closed this summer to retool.

The job gains mostly occurred in the service sector, with the goods-producing sector essentially coming out flat. The 6,000 jobs added in manufacturing were offset by losses of 2,000 jobs in construction and 4,000 in natural resources and mining. “Despite a slight moderation in the month of June, the labor market remains strong,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, in a statement. “For the month of June, jobs were primarily created in the service-providing sector.”

The professional and business services sector, which includes accounting, tax preparation and other services, added 69,000 jobs in June, while the financial activities sector added 10,000 jobs.

ADP does not separately break out the numbers for accounting jobs, but Zandi sees them as an important component of the professional services sector, along with legal and temporary services. “That’s been a source of a lot of job creation and continues to be the case,” he said.

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Payroll Small business Employment data ADP Moody's Analytics
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