Private payroll growth fell slightly in June, signaling a possible slowdown in the U.S. labor market, according to a report released Wednesday by ADP.
Businesses added 150,000 jobs this month, below the upwardly revised 157,000 in May and the Dow Jones consensus forecast of 160,000. The total was the smallest monthly gain since January.
The employment total would have been much lower if not for a hiring boom in the leisure and hospitality industry, which added 63,000 jobs, by far the largest increase among sectors measured by payroll company ADP.
Other sectors that saw increases included construction (27,000), professional and business services (25,000), other services (16,000), and trade, transport and public works (15,000).
Meanwhile, the natural resources and mining sector saw a decrease of 8,000 jobs, the manufacturing sector saw a decrease of 5,000 jobs, and the information sector saw a decrease of 3,000 jobs.
“Job gains have been solid but not broad-based,” said Nella Richardson, ADP’s chief economist. “June would have been a weak month were it not for the leisure and hospitality employment recovery.”
Wage growth for those who stayed in their current jobs also fell, falling 4.9% year-on-year, the smallest increase since August 2021. Wage growth for those who changed jobs also increased 7.7%, a figure that is also trending downward.
Most of the job creation came from businesses with 50 to 499 employees, which added 88,000 jobs last month. Small businesses added just 5,000. Regionally, 80,000 jobs were added in the South, accounting for more than half of the total.
The ADP report is a precursor to the Labor Department’s closely watched nonfarm payrolls report on Friday, which is expected to show a 200,000 increase in nonfarm payrolls following a 272,000 gain in May.
The two reports often differ, sometimes dramatically, and ADP has consistently underperformed the Bureau of Labor Statistics’ numbers. The Bureau of Labor Statistics reported that private payrolls increased by 229,000 in May, 72,000 more than ADP estimated.
