ADP’s Employment Report showed that private payrolls rose less than expected in June, as employers added 150,000 new jobs versus the 160,000 that had been forecasted. This marks the third straight month that job creation has slowed among private employers. Nearly all the gains came from service-providing sectors (+136,000), with goods producers only adding 14,000 jobs due to a slowdown in manufacturing and mining. Small businesses also continue to feel the pinch, as those with fewer than 50 employees only added 5,000 jobs. This is compared to 146,000 new jobs added among medium and large companies combined. Annual pay gains decelerated for job changers, with ADP reporting an average increase of 7.7% in June versus 7.8% in May and 9.3% in April. Job stayers saw an average increase of 4.9%, down from 5% in the previous three months. The Fed is watching this closely, as it can help alleviate wage-pressured inflation.
What’s the bottom line? “Job growth has been solid, but not broad-based,” said Nela Richardson, chief economist, ADP. “Had it not been for a rebound in hiring in leisure and hospitality, June would have been a downbeat month.”