Ahead of the widely watched non-farm payroll numbers on Friday, the latest report from private payroll company ADP shows 692k jobs were added in June, below a downwardly revised 886K in May, but better than analysts expectations of 600k.
ADP report showed that private payrolls rose 692k in June, beating expectations. However, May reading was revised down. Source: Bloomberg
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Create account Try a demo Download mobile app Download mobile appThe service-providing sector added 624K jobs led by leisure & hospitality (332K); education & health (123K); trade, transportation & utilities (62K); professional & business (53K); and financial activities (10K) while the information sector lost 4K jobs. The goods-producing sector added 68K jobs, boosted by rises in construction (47K), manufacturing (19K) and natural resources and mining (2K). “While payrolls are still nearly 7 million short of pre-COVID19 levels, job gains have totaled about 3 million since the beginning of 2021. Service providers, the hardest hit sector, continue to do the heavy lifting, with leisure and hospitality posting the strongest gain as businesses begin to reopen to full capacity across the country", said Nela Richardson, chief economist, ADP.
Service providers ang goods producers added more jobs than expected, however both segments of the economy showed a slowdown in job growth compared to previous month. Source: Bloomberg via ZeroHedge
Overall this is a positive report from the perspective of the US economy ahead of the upcoming NFP report for June. Some market participants fear a strong reading could force the Fed to reduce its ultra-loose monetary policy. On the other hand, it should be noted that ADP has been quite a poor predictor of NFP readings in recent months. The previous two Labor Department reports were disappointing and if a similar situation occurs this week, then it may indicate that the pace of recovery of the US economy is starting to weaken.
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