Employment in the private sector increased by 157,000 from May to June on a seasonally adjusted basis, according to the latest figures from payroll giant ADP, indicating that the May slowdown in employment may have been a pause.
ADP also revised down its figures from April to May slightly, to 36,000 from the initially reported 38,000 increase in jobs.
In June, ADP found that small businesses with between 1 and 49 employees added 88,000 jobs, while midsized businesses with between 50 and 499 employees added 59,000 jobs. Large businesses with more than 499 employees added 10,000 jobs.
Many of the gains came in the service industry. Employers in the goods-producing sector added just 27,000 positions, while the service-providing sector contributed 130,000 jobs. The manufacturing industry added 24,000 jobs, while the construction industry shed 4,000 jobs.
Among small businesses, the 88,000 jobs gained included 12,000 in the goods-producing sector and 76,000 in the service sector. The 157,000 jobs gained in June beat analyst forecasts of about 90,000 jobs.
“I have to say when I saw this number, I felt a sense of relief flooded over me,” said Joel Prakken, chairman of Macroeconomic Advisers, which compiles the monthly payroll report with ADP. He added that while the previous monthly report had indicated a sharp deceleration and confirmed the economy had hit a soft spot, the latest figures indicate that the May report may have just been a pause in economic expansion.
“It’s not as strong a number as we saw before May, but if we see another acceleration, this sort of number, if it is borne out on Friday [in the U.S. Bureau of Labor Statistics monthly jobs report] would be consistent with an unemployment rate that is steady and even declining a bit,” he said.
However, he noted that the figures only apply to private sector, nonfarm employment, and states are likely still shedding public employees from their payrolls. While the latest figures may be enough to stabilize the unemployment rate, the job increases would need to be between 200,000 and 300,000 to indicate a real acceleration in hiring.
“This is better than expected,” said Prakken. “We’re headed in the right direction.”
