Data on Private Hiring Suggest Job Market Is Moderating
Companies adding fewer workers to U.S. payrolls in June than the prior month indicates the job market may be cooling after outsized gains earlier this year, data from the ADP Research Institute showed July 6.
Highlights of ADP Employment
• Private payrolls rose by 158,000 (estimated 188,000) after revised 230,000 gain in May.
• Payrolls in goods-producing industries, which include manufacturers and builders, were unchanged after a 31,000 rise in May.
• Service providers accounted for all of the 158,000 gain in payrolls.
Key Takeaway
The second-lowest increase in 2017 probably reflects the challenge of finding skilled workers amid a tightening job market, and it may also be a sign businesses are holding off on expansion plans until they see more evidence the new administration’s plans are translating into legislation that will reduce taxes and spur growth. The ADP report may prompt some economists to adjust their forecasts for the private payrolls tally in the June jobs report due from the Labor Department on July 7, where the median estimate is for a gain of 170,000.
Economist Views
“The job market continues to power forward,” Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said in a statement. Moody’s produces the figures with ADP. “At this pace, which is double the rate of labor-force growth, the tight labor market will continue getting tighter.”
Other Details
• Hiring in construction fell by 2,000 after a 23,000 increase; factories added 6,000 workers.
• Professional and business services led with a 69,000 gain; education and health services added 28,000 people; trade, transportation and utilities rose by 30,000.
• Companies employing 500 or more workers increased staffing by 50,000 jobs; payrolls jumped by 91,000 at medium-sized businesses, or those with 50 to 499 employees; while small companies’ payrolls rose by 17,000.
