Small businesses again led the way to the largest number of new private sector jobs to be created in six months. The ADP National Employment Report counted 237,000 new jobs in June, 120,000 of them created at companies with fewer than 50 employees.
June’s job growth handily exceeded consensus estimates by labor economists. Surveys of their forecasts pegged job growth at just about 220,000. Tomorrow, when the U.S. Bureau of Labor Statistics releases the Labor Department’s initial jobs count for June, economists expect it to show combined private and government employment rose by about 233,000 jobs.
“The current robust pace of job growth is double that needed to absorb the growth in the working-age population,” said Mark Zandi, chief economist of Moody’s Analytics, which partners with ADP on the report. “The only blemish in the job market is the loss of jobs in the energy sector. Most encouraging is the healthy rate of job growth among the nation’s smallest companies.”
Hiring was strongest in the professional and business services sector, accounting for 61,000 jobs. The sector includes temp workers, computer professionals, and accountants, among other industries. Businesses in the trade, transportatio,n and utilities sector added 50,000 new jobs.
By size of company, the smallest increase was among companies with more than 1,000 employees. They added a mere 5,000 jobs.
The report also adjusted May’s initial private sector count from 201,000 to 203,000.
While the continued strong job growth was welcome on Main Street, it renewed concerns on Wall Street that it would strengthen Federal Reserve resolve to begin hiking interest rates later this year. Reuters said the ADP figures helped push Treasury prices lower and strengthened an already strong U.S. dollar. The implication of the latter is to make U.S. products pricier on the global market.
Still, fewer new private sector jobs were added in the first six months of this year than last, according to ADP reports. This year 1.216 million were created versus last year’s 1.383 million new jobs.
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Private business research group The Conference Board said new, online job postings dropped by 144,300 from May to June. Since the beginning of the year, new listings have increased by 184,000. A year ago, new listings grew by 305,400.
Consumers, though are upbeat about the future, with those saying business conditions are “good” increasing from 24.7 percent to 26.4 percent in June, according to The Conference Board’s Consumer Confidence report. Overall, the Consumer Confidence Index rose to 101.4 in June, matching where it stood in March. It is now at the second-highest reading since before the start of the recession.
Another report this morning from the Institute for Supply Management said economic activity in the manufacturing sector expanded in June for the 30th consecutive month. Its national factory activity index rose to 53.5 in June, a five-month high. The measure of new factory orders rose to 56.0 last month from 55.8 in May. ADP said manufacturers added 7,000 new jobs in June.
Construction spending increase by 0.8 percent in May, to an annual rate of $1.04 trillion, according to the U.S. Commerce Department announcement this morning. It is the highest level since October 2008. Construction jobs increased by 19,000 in June, said ADP.