According to a report released by the American data processing company ADP on Wednesday, job growth in the private sector in the United States slowed slightly in June, indicating a potential slowdown in the labor market.
The latest data from this American human resources management company shows that the private sector added 150,000 jobs last month, which is lower than the predictions of 160,000 jobs by Dow Jones & Company and Reuters economists respectively, and also lower than the revised upward figure of 157,000 jobs in May. This marks the lowest monthly increase since January.
In June, job growth in the private sector was mainly concentrated in the service industry. Out of the 150,000 new jobs, 136,000 came from the service industry, especially in the leisure and hospitality sector, which added 63,000 positions, accounting for about 40% of all new positions reported by ADP.
The professional and business services sector added 25,000 jobs, while other services added 16,000 jobs, and trade, transportation, and utilities also added 15,000 jobs.
However, there were declines in some sectors within the service industry, such as the information sector which lost 3,000 jobs.
In other sectors, the construction industry added 27,000 jobs, while the natural resources and mining industry lost 8,000 positions, and manufacturing also saw a decrease of 5,000 jobs.
In terms of business size, medium-sized enterprises with 50 to 499 employees led in job growth, adding 88,000 positions; large enterprises with 500 or more employees added 58,000 jobs; while small businesses with fewer than 50 employees only added 5,000 jobs.
The average wage of those staying in their current company increased by 4.9% year-on-year, marking the smallest increase since August 2021. However, the wage increase for job switchers was 7.7%, showing a downward trend. Both indicators decreased by approximately 1% compared to the previous month’s report.
ADP’s data is released a day ahead of the more closely watched US Department of Labor’s nonfarm payrolls report. According to Reuters’ survey of economists, the government is expected to report an increase of 190,000 nonfarm jobs in June, following a gain of 272,000 jobs in May. The unemployment rate is expected to remain unchanged at 4%.
Despite the sometimes significant differences in the data between the two reports, the ADP report serves as a precursor to the government report.