US companies added almost half a million jobs in June, the most in over a year and underscoring the ongoing strength of the labor market.
(Bloomberg) — US companies added almost half a million jobs in June, the most in over a year and underscoring the ongoing strength of the labor market.
Private payrolls increased by 497,000 last month, marking the biggest advance since February 2022, according to figures published Thursday by the ADP Research Institute in collaboration with Stanford Digital Economy Lab. It was more than double the median estimate in a Bloomberg survey of economists.
The job gains were relatively broad-based, including advances in construction, trade and transportation and other service industries, with leisure and hospitality adding the most jobs since September 2021.
Every region but the South added jobs. Employment gains were concentrated in firms with fewer than 250 employees.
Wage growth, meanwhile, decelerated. Workers who stayed in their jobs experienced a 6.4% pay increase in June from a year ago. For those who changed jobs, the median rise in annual pay was 11.2%. Both rose at the slowest pace since 2021.
“Consumer-facing service industries had a strong June, aligning to push job creation higher than expected,” Nela Richardson, the chief economist at ADP, said in a statement. “Wage growth continues to ebb in these same industries, and hiring likely is cresting after a late-cycle surge.”
Treasury yields popped and US stock futures added to losses following the data.
Jobless Claims
A separate report out Thursday showed applications for unemployment benefits rose by 12,000 last week, to 248,000. Continuing claims — a proxy for the number of Americans receiving those benefits — fell to 1.7 million in the week ended June 24, a four-month low.
Read More: Drop in Hours Worked Seen as Next Clue to Assess US Labor Market
The broad-based increase in hiring, paired with a still relatively low level of jobless claims, points to the resilience of the country’s job market. While there are pockets of weakness — notably in technology and finance — the broader labor picture remains one of strength.
ADP’s report showed a few sectors shed jobs, including manufacturing, information and financial activities. Job cuts, as measured by Challenger, Gray & Christmas Inc., fell to nearly half their May level in June, though from a year earlier, cuts are still 25% higher.
A monthly jobs report due Friday from the Bureau of Labor Statistics, which also includes government payrolls, will provide further insight into the direction the labor market is headed. Forecasters project that report will show employers added 225,000 jobs in June and annual wage growth cooled somewhat.
–With assistance from Jordan Yadoo, Molly Smith and Augusta Saraiva.
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