In June, private sector employment increased by 98,000, a decrease from May's 122,000 and below the Dow Jones forecast of 110,000. The report, released by ADP, shows that nearly half of the job growth came from the education and health services sector, which continues to lead in payroll increases.
Other sectors that saw gains included trade, transportation and utilities with 15,000 jobs added, financial activities with 14,000, and other services contributing 8,000. However, the leisure and hospitality sector only added 2,000 jobs, reflecting ongoing challenges in an industry often seen as a barometer for consumer demand.
Nela Richardson, ADP's chief economist, noted that the current hiring pace reflects both supply and demand issues, indicating that job seekers are facing longer search times while certain industries experience labor supply constraints. Additionally, annual pay growth remained steady at 4.4% for those staying in their positions, while job switchers saw an increase to 6.6%.
Employment gains were primarily among small businesses, which added 53,000 jobs, contrasting with larger firms that added 25,000. The upcoming nonfarm payrolls report is expected to show a rise of 115,000 jobs for June, with the unemployment rate anticipated to remain at 4.3%